The shareholders of Tanfield, the parent company of aerial equipment manufacturer Snorkel, today voted to approve the sale of Snorkel to Xtreme Manufacturing, the Las Vegas-based, manufacturer of telescopic handlers. According to the deal, agreed upon last month, Xtreme will acquire a majority ownership stake, while Tanfield retains 49-percent ownership of the struggling aerial work platform manufacturer.
Once the deal is finalized, Snorkel ownership will be transferred to a new company known as Snorkel International Holdings. Xtreme will provide between $35 million and $50 million in working capital to fund Snorkel. According to the agreement, should Snorkel achieve EBITDA of at least $25 million in any 12-month period during the next five years, Tanfield can demand payment of ‘preferred interest’ in exchange for an additional 19 percent of Snorkel equity. Tanfield can demand payment of preferred interest of $50 million to be paid when Snorkel International Holdings can fund the payment and its net debt/EBITDA ratio is less than 2.
To read RER’s coverage of the transaction, please go to: http://rermag.com/manufacturers/ahern-s-xtreme-manufacturing-agrees-acquire-majority-interest-snorkel.