Columbus McKinnon Charts a Financial Overhaul to Fund Major Acquisition

Columbus McKinnon US1993331057

To finance its planned takeover of Kito Crosby, Columbus McKinnon is executing a sweeping financial restructuring. The strategy combines a downsized bond offering, a substantial term loan, and the divestiture of a core US manufacturing division. The central question for investors is whether these moves will sufficiently fortify the company's balance sheet.

Concurrent with its new financing efforts, Columbus McKinnon has agreed to sell its US chain hoist and chain manufacturing operations to Pacific Avenue Capital Partners for $210 million. The transaction, expected to yield approximately $160 million in net proceeds after taxes and expenses, is viewed as a pivotal strategic shift. Management and industry observers interpret the sale as a move away from traditional manufacturing toward higher-margin "intelligent motion solutions."

The Financing Package: Bonds, Loans, and Ratings

The company has successfully placed a $900 million private offering of senior secured notes, carrying a 7.125% interest rate and maturing in 2033. Notably, this figure represents a significant reduction from the initially planned $1.225 billion. Complementing this, a syndicated Term Loan B for $1.65 billion has been priced at 99% of par with an interest rate of SOFR plus 3.50%. Both transactions are scheduled to close on January 30, 2026.

According to the company, the capital raised will serve several purposes:
- Funding the acquisition of Kito Crosby Limited.
- Repaying certain existing liabilities of the target company.
- Refinancing a portion of Columbus McKinnon's own corporate debt.
- Covering fees and expenses related to the transactions.

Credit agency S&P Global Ratings assigned a 'B' issue rating to the proposed notes, with a recovery rating of '3'. This indicates an expected recovery range of 50–70% in a hypothetical default scenario, signaling that credit risks persist despite the restructuring plans.

Operational Performance and Metrics

For its third fiscal quarter ending December 31, 2025, Columbus McKinnon released preliminary figures. The company anticipates net sales between $250 million and $260 million for the quarter, bringing the nine-month total to an estimated $747–$757 million. Adjusted EBITDA for Q3 is projected to be $38–$40 million, with adjusted earnings per share forecast between $0.58 and $0.63.

Additional operational highlights include:
- Q3 orders are estimated between $245 million and $250 million, compared to $253.7 million in the previous quarter.
- The order backlog stands at $335–$345 million, marking an approximate 3% sequential decrease but a 5% increase from year-end levels.

Market Performance and Outlook

The equity recently closed at €18.00, reflecting a daily decline of 0.55%. It currently trades just 2.7% below its 52-week high of €18.50. A 14-day Relative Strength Index (RSI) reading of 81.5 suggests the stock is in technically overbought territory in the short term.

While the shares show near-term strength, fundamental uncertainties regarding integration risks and the company's credit rating may temper investor sentiment. The market is likely to remain cautious until the financing transactions are finalized and the net effects on the balance sheet become fully visible.

Final Assessment: Provided the bond and term loan offerings close as planned on January 30, 2026, and the divestiture generates the expected ~$160 million in net proceeds, Columbus McKinnon will have formally secured the funding for the Kito Crosby acquisition and initiated debt reduction. However, S&P's 'B' rating remains a clear indicator of ongoing credit risk. The ultimate success of this financial overhaul will hinge on the seamless integration of the acquisition and the effective execution of the promised debt reduction.