Linde has sold its forklift truck division, recently renamed Kion, to finance houses Kohlberg Kravis Roberts and Goldman Sachs Capital Partners for four billion euros.
Johannes Huth, head of European operations at KKR, and Alexander Dibelius, the head of Central and Eastern Europe at Goldman Sachs, said: “Kion is an extremely well-positioned company in the international industrial truck industry which has excellent prospects.
“Together with Kion’s effective management team and highly-qualified employees, we will seek to tap the undoubted potential for growth and earnings in the company and to achieve sustainable increases in its value. In the medium term, our objective is an initial public offering.”
The Kion Group, which the Linde Group established as a legally independent umbrella company for its three forklift truck and industrial equipment brands, Linde, Still and OM, has more than 20,000 employees. In the 2005 financial year, the division achieved sales of around 3.6 billion euros. KION is a market leader in Europe.
“We are utterly convinced that KKR and Goldman Sachs have the right overall concept for the group” said Professor Wolfgang Reitzle, president of the executive board of Linde.
“After carefully examining all the options, we have chosen a strong and strategically- oriented partner, who will facilitate a seamless transition and enable KION to continue on its path towards earnings-based growth.”
Hubertus Krossa, chairman of the Kion management board, said: “I am delighted that we have found strong partners in KKR and Goldman Sachs who are completely behind KION’s industrial concept. Together, and with renewed vigour, we will continue on the path towards growth we have taken so far.”
In the 1980s, KKR pioneered a form of buyout that involved taking on a high level of debt by issuing high-yield, high-risk bonds which became known as “junk bonds”. Once the takeover was complete, KKR restructured the business selling off selected assets and cutting costs. The company would then be resold at a substantial profit.
