Manitowoc may use junk bonds or bank loans to help fund Grove Worldwide purchase

By Sara Rosenberg

New York, March 19 - The Manitowoc Co. may use new or existing bank credit facilities or high-yield bonds to help fund its acquisition of Grove Worldwide, according to the company's senior vice president and chief financial officer, Glen E. Tellock. He added that the company is currently leaning towards the high yield market since the present credit facility does not permit adequate borrowings to fund the acquisition. Manitowoc is expecting to have the financing details sorted out by early April.

Tellock said in a conference call that the borrowing would be used to raise about $200 million in cash towards the $270 million estimated acquisition price. The total amount will be paid through "a combination of cash and approximately two million shares of Manitowoc common stock based on current market prices," a company press release said. The stock to be issued to Grove Worldwide shareholders will be valued at about $71 million.

Tellock also said the company would have to go to its lenders to amend its current credit facility.

Deutsche Banc Alex. Brown has been Manitowoc's advisor on the transaction and "has provided a financial commitment to Manitowoc," the press release said.

According to Manitowoc senior management, this transaction is expected to close by June 30, 2002 subject to regulatory approval and necessary votes by Grove Worldwide stockholders.

"In addition to its strategic value, this acquisition is well within our financial requirements in terms of earnings and EVA," said Tellock in the release. "We expect Grove to be neutral to earnings in 2002. However, based on modest revenue increases, along with the many synergies we have identified between Manitowoc and Grove, we expect the acquisition to be accretive to earnings in 2003 of $0.20 to $0.30 per diluted share. Equally important, we expect the transaction to be EVA positive within the next 18 to 24 months."

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