18.04.2007

IPO for Wacker

Wacker Construction Equipment which recently announced plans to merge with Neuson Kramer Baumaschinen of Austria, has announced plans for an Initial Public Offering of its stock later this spring.

The company will float on Frankfurt Stock Exchange’s Official Market. The company’s revenues grew by over 23 percent in 2006 to €619.3 million, while profits before interest and tax jumped 51.3 percent to €76.7 million.

The merger with Neuson will occur after the IPO to form Wacker Neuson AG, the combined business will have revenues of around €900 million. With an EBIT of around €125 million.

The Wacker family owns 87 percent of the outstanding shares, with Dr Ulrich Wacker chairing the supervisory board, while the management holds just over three percent. 10 percent of the equity is held in the company treasury.

Wacker’s chief executive and president, Dr.-Ing. Georg Sick, who will also head the merged business said “The high-quality portfolios of both companies are highly complementary with almost identical user bases, target markets and sales channels. In particular, we aim to capitalise on compact equipment market opportunities in Europe, the USA and Asia,”

The Neuson deal is the fourth merger/acquisition in less than two years for Wacker, it bought Weidemann in 2005, adding a line of compact wheel loaders and last year purchased Drillfix AG and Ground Heaters Inc.

In addition to entering the mobile compact equipment market Wacker has been expanding its rental business and building up an international sales and service network.

Wacker recently announced that it was also ending its long term partnership with Bobcat, the company has distributed Bobcat in Germany, Austria and Switzerland for many years through its company stores. The ending of the agreement was both mutual and inevitable as Wacker’s product line increasingly overlaps with that of Bobcat. Neuson’s Kramer telehandler range would have added to that overlap.

Wacker was founded in 1848 when Johann Christian Wacker set up a blacksmith’s shop, in recent years it has probably been best known for its compaction hammers and plates. The company has over 160 sales and service stations in more than 30 countries.

In 2006 long time investor Lindsay Goldberg & Bessemer sold its 31.5 percent holding, a new family holding company was set up to acquire 27 percent while the executive board acquired the balance. The flotation is likely to involve at least the 27 percent holding, possibly along with the 10 percent treasury shares, while the family and management are likely to retain a 63 percent holding, at least in the short term.