On The Block: Columbus McKinnon Seems Headed for a Sale

A bevy of well-known companies suffering from drooping share prices in a bullish stock market have enlisted investment banking consultants to help them determine their futures. At least one company – materials handling equipment maker Columbus McKinnon Corp. – appears close to a sale. Also going the route of exploring strategic alternatives, including a possible sale, were Dole Corp., Schein Pharmaceutical Inc., Snyder Communications Inc., and Mark IV Industries Inc. Previous restructurings to deal with operational problems or unlock stock value have marked the recent history of all five firms. Columbus McKinnon retained Bear Stearns to help it map out strategic alternatives – with a sale looming as the most likely outcome. The company did not return calls for comment, but Timothy T. Teevens, president and CEO, in mid-January told M&A’s sister publication, Mergers & Acquisitions Report, that the investment bank was preparing so-called “black books” on Columbus McKinnon that were to be distributed to interested bidders. Teevens said a sale could be completed later in 2000. Amherst, N.Y.-based Columbus McKinnon, which manufactures hoists, steel-welded chains and attachments, and industrial components, has been under pressure from major stockholders to sell the company because of dissatisfaction with recent performance. A specific source of annoyance has been the company’s Automatic Systems Inc. (ASI) automotive business, which was acquired two years ago in a diversification move and has been a disappointing performer. The dissidents blame ASI for depressing the company’s stock price. In October 1999, Columbus McKinnon said it was reviewing its options on ASI, noting that the unit’s dependence on the automobile business made it a more cyclical operation than the company’s core materials handling units. However, ASI was still part of Columbus McKinnon when the prospective sale announcement was made. Columbus McKinnon shares closed at 13-5/8 on January 31 on Nasdaq. For the 52 weeks ended January 31, the price range ran from 9-3/4 to 30.