Manitex International, Inc. (MNTX), a leading provider of engineered lifting solutions, will raise $14.8 million by offering 1.375 million shares at $10.75 a piece to certain investors.
The offer price is at a 6.4% discount to Manitex’s Tuesday's closing stock price of $11.49. Manitex shares slid 6% on the news, a common knee-jerk reaction to share offerings.
The offering represents 11% of the company’s total shares outstanding. The offer will close on or around Sep 30, 2013, subject to the satisfaction of customary closing conditions. Manitex plans to utilize the net proceeds to repay its debt. Further, the company intends to use the balance to finance acquisitions as well as for meeting other corporate needs. The previous offering from Manitex came in July last year. Manitex had made an offering of 5 million shares. The net proceeds of approximately $3.8 million were utilized to reduce its debt.
Manitex exited the second quarter with cash and cash equivalents of $3.1 million. The company had total indebtedness of $52.8 million with a debt-to-capitalization ratio of 45%. In August, Manitex completed the acquisition of Sabre Manufacturing LLC, for $14 million. The acquisition will provide Manitex an opportunity to expand its offerings in the specialized equipment market and energy sector. With the proceeds from the share offering, Manitex will be able to reduce its debt load and also pursue further acquisitions and enhance its growth profile.
Manitex expects modest economic improvement in the U.S. while European economy is forecasted to continue to be weak. Generally, the third quarter is stronger than the fourth for Manitex because of more production hours. This year, however, the company expects the reverse from the way production is being arranged at its facilities.
The recent softness in the energy sector continues as evident by a reduction in the North American rig count. However, Manitex believes this softening has bottomed out and the sector remains a source of significant growth potential in both the short and long term. The company expects to generate 50% of its sales from the energy area and the balance from general commercial markets.
Increased share count due to the offering will have a dilutive impact on earnings. However, margins will benefit from lower interest due to the debt repayment.
Bridgeview, Ill-based Manitex International is a leading provider of engineered lifting solutions including boom truck and rough terrain cranes, rough terrain forklifts, special mission oriented vehicles, container handling equipment and specialized engineered trailers.
Manitex currently retains a Zacks Rank #3 (Hold). Other stocks in the same industry with favorable Zacks ranks are Gorman-Rupp Co. (GRC), with a Zacks Rank #1 (Strong Buy), and EnPro Industries, Inc. (NPO) and Graco Inc. (GGG), both carrying a Zacks Rank #2 (Buy).
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