Morris Material Handling Inc of the USA has sold its crane and hoist operations in the UK, Singapore and Thailand to the UK management team for an undisclosed sum.
The new owners of what is now Morris Material Handling Ltd, with headquarters in Loughborough, UK, are managing director Mike Maddock, finance director Steve Davis, operations director Bill Oliver, and commercial manager Andy Miller. Funding was through a loan from GE Capital.
Although the deal secures the jobs of 300 employees in the UK, and 60 more overseas, the transfer of ownership proved acrimonious. The US bankers controlling Morris Inc while it has Chapter 11 bankruptcy protection put the UK business into receivership on the morning of 7 March and sold it to the managers in the afternoon. The new owners acquired only the assets it desired and none of the liabilities. Suppliers have been left with bad debts amounting to many thousands of pounds, and more than $100,000 in at least one case. The arrival of aggrieved creditors at the Loughborough head office the following afternoon led to the police being called out to calm the dispute. Creditors now have to press their case with the receivers winding up the affairs of the former company.
The new owners chose not to purchase either the factory automation business not the dockside crane business, nor the operations in South Africa and Australia. The factory automation business was sold separately to Savoye Logistique, a subsidiary of Legris Industries of France. Morris had already withdrawn from the dockside business two years ago but had certain outstanding liabilities.
What the new owners have bought is the Morris brand in all markets outside North America and an established business active in hoists, cranes, parts, service and training. While they have taken ownership of all equipment in the Loughborough factory, they only have a lease for the factory. The land is being sold to property developers. It is a large site, part of which has planning permission for redevelopment. The local council is planning a new road across the site.
The change of ownership follows the decision by Morris Material Handling Inc (formerly P&H Material Handling) to divest its international operations as part of a strategy to return to solvency.
“This is by far the best result for the workforce and the future of the company,” said Maddock. “Our offer was the only one which left the business largely intact. The support we received from the workforce throughout the protracted negotiations was a key factor in finally achieving this successful conclusion.” The latest change of ownership is the second management-led buyout at Morris in recent years. In June 1994 Trafalgar House sold it to the managers and venture capitalists. Four months later they sold out to P&H Harnischfeger for $25m. P&H then adopted the name of its subsidiary in 1998 after Chartwell Investments bought control from Harnischfeger.
When it was bought by the Americans Morris had about 750 employees, two thirds of whom were based at Loughborough, and annual sales of about £60m.
The new company has 360 employees and expects sales of £25m this year.
