Maxim to take Coast
21. April 2017 | Comments (0)
The transaction is subject to the approval of Essex shareholders and other closing formalities and is expected to complete by midyear. Maxim will then begin integrating Coast into its existing business. The deal provides Coast/Essex with the option to consider other offers up until the completion date.
As part of the deal Coast has agreed a Fifth Amendment to its Second Amended and Restated Credit Agreement with Wells Fargo, extending the maturity date of its credit facility to August 14, as long as progress is made towards completion of the deal by the end of June.
The move follows the purchase by Maxim of the a chunk of the Essex Crane assets last September See Maxim gets Essex Crane assets
Coast Crane is based in Seattle, Washington and was founded by Ralph Hovis in Portland, Oregon in 1971 as a distributor selling cranes and later access equipment, while also offering bare crane rental throughout the US West Coast and became one of the early Grove distributors.
The company was acquired by Boston based Audax in 2004, and then Northern Capital Appreciation in 2007. In 2010 the company filed under Chapter 11 bankruptcy protection and then acquired by Essex a couple of months later for $80 million.
See Coast Crane Changes Hands
See Coast files Chapter 11
See Essex acquires Coast Crane
A statement from Maxim said: Maxims acquisition of Coast meaningfully enhances Maxim's full-service, nationwide crane rental and lifting solutions platform and expands its operations in one of the nations fastest growing crane rental markets.
Maxim chief executive Bryan Carlisle added: Coast Crane offers one of the most experienced teams of crane professionals in the region. Their state of the art fleet provides customers with a best in class brand of products, parts, services and rental equipment. We are confident that the combination of Coast and Maxim will bring added value to our combined customer base, employees and the industry.
Coasts chief executive Nick Matthews said: We believe that this transaction delivers the best current return for our shareholders and provides a good opportunity for our employees to work for a company positioned for growth due to its experienced management team, future business prospects and strong balance sheet.
This looks like a good move for Maxim, and a blessing for the team at Coast Crane. Coast ran in to difficulties in 2010 for a number of reasons, brought exasperated by the effects of the economic crash. Its acquisition by Essex was far from beneficial though. Essex, which was acquired by private equity firm Hyde Park from Kirtland Capital in 2008, had been struggling with plunging revenues since early 2009, thanks to the economic crisis, but also from an aging crawler crane fleet. It then went on a new crane buying binge in order to replace ancient mechanical crawlers with the more recent models a increasing number of customers wanted. All this as the market contracted.
The acquisition of Coast looked to be more of a distraction for Essex, and was followed by some odd decisions regarding Coast, possibly coming from a management team that did not understand the different nature of the Coast Crane business? Hopefully the move to Maxim will lead to more positive times for the remaining Coast Crane team.