Konecranes takes full ownership of MHE-Demag in Southeast Asia26 February 2020
Konecranes has signed an agreement to acquire the 50% stake held by partner Jebsen & Jessen in its MHE-Demag JV, for approximately €147m.
The move will increase Konecranes’s presence and market coverage in the strategically-important and fast-growing Southeast Asia region, said the crane manufacturer, creating further opportunities for service sales and simplifying the distribution channel for cranes and components.
The acquisition expected to grow sales in Asia Pacific by around 30%, with Konecranes estimating that the deal will add around €150–180m in annual sales and around €25–30m of annual EBITDA to the group by 2022.
“With the MHPS acquisition now behind us, Konecranes is ready to take the next steps on its growth path,” said Teo Ottola, Interim CEO and CFO of Konecranes. “This acquisition underlines our intent to pursue profitable growth, and meaningfully expands our footprint in a strategically important region with several fast-growing markets. The acquisition will also bring greater balance to Konecranes’s regional sales structure.”
MHE-Demag is a leading supplier of industrial cranes, hoists and services in Southeast Asia, selling under the MHE and Demag brands to sectors from general manufacturing to aerospace. The company, which is headquartered in Singapore, has around 1,800 employees, including around 700 service engineers, working across 11 factories and more than 70 service locations. It runs operations in eight countries— Australia, Indonesia, Malaysia, Singapore, the Philippines, Taiwan, Thailand and Vietnam—as well as distributing products through resellers in several other countries including Brunei, Cambodia, Laos, Mongolia, Myanmar, Papua New Guinea and Timor-Leste.
Service represents for around half of MHE-Demag’s annual net sales, with cranes and components accounting for 35%, and other industrial products the remaining 15%. Following the acquisition, Konecranes plans to add a further 700 service engineers to the MHE-Demag team.