Charlotte-based Columbus McKinnon will acquire Richardson, Texas-based Kito Crosby Limited from funds managed by global investment firm KKR in a transaction valued at $2.7 billion. Columbus McKinnon expects the deal to close this calendar year, pending regulatory approval.
Shares of Columbus McKinnon declined about 40% in Tuesday morning trading after news of the deal and the company reported quarterly earnings of 56 cents per share, lower than the analysts’ estimates of 74 cents. Shares were trading for about $21.65 at 11:15 a.m., after trading between $29 and $45 over the past year.
As part of the deal, New York investment firm Clayton, Dubilier & Rice is acquiring a 40% interest in Columbus McKinnon.
Both Columbus McKinnon and Kito Crosby produced more than $1 billion in revenue last year, and each has about 3,500 employees. Columbus McKinnon’s key products include hoists, crane components, precision conveyor systems, light rail workstations and motion control systems. It has manufacturing sites in 25 countries, with half of its employees in the U.S.
Kito Crosby products are involved in the lifting and securement industry. Its brands include Kito, Crosby, Harrington, Gunnebo Industries and Peerless.
As a combined business, Columbus McKinnon expects to have annual revenue of $2.1 billion and adjusted pretax income of $486 million. Columbus McKinnon estimated $70 million in annual cost savings through the deal.
The combination improves scale and product scope and increases Columbus McKinnon’s geographic reach, particularly in Asia, while complementing Columbus McKinnon’s existing strength in Latin America, Europe, the Middle East and Africa, according to a release.
Columbus McKinnon moved its headquarters to Charlotte from a suburb of Buffalo, New York, in 2022, bringing about 100 jobs.
“This is an important next step in further strengthening Columbus McKinnon’s position as a scaled, holistic provider of intelligent motion solutions in materials handling. We’ve long had a great respect for Kito Crosby’s strong portfolio of offerings,” says Columbus McKinnon CEO David Wilson in a release.
“Through this strategic combination, we’re creating a company that is extremely well-positioned to deliver real-world solutions for customers, with favorable tailwinds from megatrends, including reshoring, infrastructure investment, modernization of aging industrial facilities, and rising automation needs due to labor shortages.”
Kito Crosby has manufacturing plants that serve more than 50 countries. KKR has owned the business since 2013. Revenue has more than doubled since then, while the payroll has quadrupled with expansion into new products and markets. In 2024, Kito Crosby generated $1.1 billion in revenue.
As a result of Clayton Dublier’s investment in Columbus McKinnon, it is expected that Mike Lamach, Nate Sleeper and Andrew Campelli will join the board of directors upon closing.
Columbus McKinnon will fund the deal with debt financing of $3.05 billion from J.P. Morgan and an $800 million convertible preferred equity investment from Clayton Dublier
The Clayton Dublier investment include a 7% coupon, payable in cash or payment-in-kind at Columbus McKinnon’s option, and a conversion price of $37.68. CD&R does not have a stake in the company. BlackRock Fund Advisors is the company’s largest owner.
Advisors
For Columbus McKinnon, J.P. Morgan Securities is acting as the financial adviser, and DLA Piper and Hogan Lovells are acting as legal advisers. Evercore and Goldman Sachs are acting as financial advisers for Kito Crosby and KKR, while Kirkland & Ellis is acting as legal advisor. Debevoise & Plimpton is acting as legal adviser for CD&R, with Guggenheim Securities acting as its financial adviser.