Cargotec will likely get MacGregor sold in the coming days. That’s the rumor. Will the share price rise or fall? MacGregor’s latest results were better than expected.
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Eki’s preview comments regarding Cargotec’s Q3 report release on Wednesday. 
Based on the conference call preceding the quiet period, the demand situation has remained good in Hiab and MacGregor. We expect the 2024 guidance to be reiterated. Comments on Hiab’s market outlook and potential further information on the MacGregor divestment are naturally of interest. In our view, the stock remains expensive.
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Report published. There is an interesting sentence: “We announced in May that we had initiated the sale process for MacGregor, with the intention of finding a solution for MacGregor during 2024. The sale process has progressed according to plan, and with the good progress made in October, our goal is to sign a deal before the end of the year. We are currently separating MacGregor from Cargotec and preparing MacGregor to operate independently.”
The goal is to sign a deal and immediately after they are preparing it to operate independently. Does that give the impression that MacGregor would become its own company?
Outlook has been revised upwards.
MacGregor’s figures are improving, so it likely won’t be let go at a bargain price?
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And just to make sure there’s no confusion, the guidance raise was already factored into the forecasts.
This was said with love, so I hope no one takes offense.
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I placed a small bet on one of the gems of Finnish manufacturing after seeing this story in Kauppalehti just under two weeks ago. I actually saved a screenshot of the KL headline so that I could smirk and pat myself on the back on the day the results are released.
Kauppalehti 12.10. →
I won’t take a stand on whether it’s better to jump on board with Kalmar, but I can say that the timeline for the sale of MacGregor was a positive surprise in my opinion. It’s hard to guess the sale price of MacGregor, as due diligence was surely started months ago if signatures are already being put to paper before the turn of the year. I also agree with @enska’s view that MacGregor will likely continue as an independent company.
Cargotec’s market regarding Hiab remains challenging, and I have too little time to try to delve into the situation, so for now, I retreated to the sidelines immediately. Given Hiab’s market position, expertise, and history, I could also stay on the sidelines with a suitable stake, but for now, I’ll just thank Kauppalehti for its part in driving the share price down.
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Here is an article from Sijoittaja.fi about Cargotec and its results. The latter part of the article is behind a paywall; as such, the article doesn’t really offer much new for those who have been reading this thread.
Exactly right. Competent management at Cargotec. A buddy (who isn’t an insider) works there and said that things are going well and something big is still happening this year. Usually, there’s some truth to these things. Good demand for Hiabs, and that corporate restructuring (deal) will likely continue to raise the share price in the future.
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Eki’s latest company report on Cargotec.
Cargotec’s Q3 orders exceeded expectations, and revenue and margins were roughly in line. The upgrade to the 2024 guidance was once again already baked into forecasts. Our 2024-2026 forecasts have nevertheless risen quite noticeably. Based on the sum-of-the-parts calculation, there is still no justified upside in Cargotec’s share, and we maintain our sell recommendation. However, following the increase in value in the calculation, we are raising the target price to EUR 51.0 (44.0), i.e., close to the midpoint of the sum-of-the-parts valuation range.
Quoted from the report:
Our forecasts up again
Following the strong Q3 report, our 2024-2026 group forecasts have risen as shown in the table. The changes are almost purely revenue-based (Hiab: +5…+8%; MacGregor: -10…+10%), with margin expectations remaining roughly unchanged. The 2024 EPS forecast is further boosted by a lower-than-expected group tax rate.
Cargotec’s better-than-expected Q3 report and especially the strong cash flow have led to faster-than-estimated growth in the group’s net assets. This is also reflected in the valuation concerning net debt (i.e., assets) at the end of 2025.
Hey everyone,
Could you clarify what happens if I buy Cargotec shares now and Hiab is spun off? How will this affect me as a shareholder? Additionally, will Hiab become an independent listed company, just like Kalmar has?
Thanks!
It depends on how the separation takes place. If someone buys Hiab directly, Cargotec would likely distribute the proceeds as a return of capital or a special dividend to shareholders. If Hiab, on the other hand, is listed on the stock exchange as its own company, Cargotec shareholders will receive its shares, just as happened with Kalmar when it was spun off.
It depends on the exit method. If the business is sold to another company, Cargotec receives the proceeds, and the company decides what to do with the funds. If, on the other hand, it is done the same way as in the Kalmar case, you receive an ownership stake.
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Once MacGregor has been sold, Cargotec’s name on the stock exchange will change to Hiab. Similarly, the name of the shares you own will change to Hiab. That’s it.
Regarding the sale of MacGregor, it has been stated that it will not list on the stock exchange as an independent company. Therefore, Hiab will receive capital equivalent to MacGregor’s sale price, which it can distribute to its shareholders or use for things like acquisitions. I’m sure the shareholders will benefit from this in some way.
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Thanks 
This answer clarified things nicely and I think I’ll buy a small slice.
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A buyer has been found for MacGregor.
CARGOTEC CORPORATION, INSIDE INFORMATION, 14 NOVEMBER 2024 AT 7:00 PM EET
Inside information: Cargotec sells MacGregor business to funds managed by Triton for an enterprise value of EUR 480 million to support Hiab’s future growth
Cargotec Corporation (“Cargotec”) has today signed an agreement to sell its MacGregor business area (“MacGregor”) to funds managed by Triton (“Triton”) for an enterprise value of EUR 480 million (“Transaction”) to support Hiab’s future growth.
Transformation into a standalone Hiab estimated to take place on 1 April 2025
Cargotec’s transformation project, which included the listing of Kalmar as a separate company, preparing Hiab to operate as a standalone company, and finding a solution for MacGregor, has progressed according to the plan and targets set by the Board of Directors in 2023. After evaluating different alternatives, Cargotec’s Board of Directors is convinced that the Transaction is the best possible option for Cargotec’s shareholders from a value creation perspective. Upon completion of the Transaction, Hiab would be Cargotec’s only business and could implement its strategy independently.
Following the signing of the agreement to sell MacGregor, Cargotec’s Board of Directors intends to propose to Cargotec’s General Meeting that the company’s name be changed from Cargotec to Hiab. Simultaneously with the name change taking effect, Cargotec’s current CEO, Casimir Lindholm, has announced his intention to step down as the company’s CEO after the successfully implemented transformation project. At that time, the Board would appoint Hiab’s President, Scott Phillips, as the CEO of the renamed company formed from the current Cargotec. Cargotec currently estimates that these measures to transform into a standalone Hiab could take place on 1 April 2025. Mikko Puolakka, Cargotec’s current CFO, would continue as the CFO of the standalone Hiab.
Completion of the transaction is expected to take place by 1 July 2025 at the latest
MacGregor is a leader in sustainable maritime cargo and load handling, with an offering that includes a strong product portfolio, services, and solutions. Its sales in 2023 were EUR 733 million and comparable operating profit was EUR 33 million.
Triton is a leading European private equity investment firm that invests in medium-sized companies. Triton focuses on investing in companies that provide critical goods and services in its three core sectors: business services, industrial technology, and healthcare. Triton has previous experience in investing in the maritime sector and extensive experience in carve-out investments.
The enterprise value of the Transaction is EUR 480 million, and as a result, Cargotec expects to record a tax-free loss on sale of approximately EUR 200 million in the fourth quarter of 2024. The loss on sale will be recorded as a goodwill impairment in items affecting comparability as part of discontinued operations. Cargotec estimates that the total costs arising from the separation of MacGregor, in addition to the goodwill impairment, will be approximately EUR 25 million and will be recorded as items affecting comparability as part of discontinued operations.
The Transaction is subject to regulatory approvals and consultations with employee representative bodies in the relevant jurisdictions. Completion of the Transaction is expected to take place by 1 July 2025 at the latest. In addition to financing Hiab’s growth, Cargotec’s Board of Directors estimates using part of the proceeds from the Transaction for the payment of an extra dividend.
The sale of the business is a continuation of the decision made by Cargotec’s Board of Directors on 14 November 2022 that MacGregor will not be part of Cargotec’s portfolio in the future. However, from a value creation perspective, the timing for divesting the business was not optimal at that time. Cargotec started the sale process of the business in May 2024, as MacGregor’s performance and market conditions had clearly improved.
“The agreement to sell MacGregor is the last major milestone in our project to unlock shareholder value by separating Cargotec’s businesses into standalone companies. The two-year project has progressed according to our plans and is now in its final stages. The proceeds from the sale will accelerate Hiab’s ambitious growth plans based on innovations and acquisitions. MacGregor will become a strategic business for its new owner, who will develop the business and focus on it fully. This will enable the business to continue growing and improving profitability,” says Casimir Lindholm, CEO of Cargotec.
“MacGregor stands out with its engineering expertise, wide and sustainable product portfolio, high-quality products, and strong reputation. Triton looks forward to working with the company and its employees to continue developing its market-leading position, especially by strengthening the aftermarket and service business, where we see great potential. MacGregor is at the core of Triton’s goals to invest in market leaders with high potential and a strong competitive advantage,” says Ilkka Tuominen, Investment Advisory Professional at Triton.
MacGregor to be reported as part of discontinued operations
Following the signing of the agreement to sell MacGregor, Cargotec will report the MacGregor business area as part of discontinued operations starting from the fourth quarter of 2024. Cargotec will publish its updated financial information before the publication of its 2024 financial statements bulletin.
2024 outlook updated
Cargotec estimates Hiab’s 2024 comparable operating profit margin to be above 14.0 percent.
The business area’s 2024 profitability outlook is presented in accordance with the external reporting principles used in 2023.
Background to the outlook update
The Hiab outlook specified on 23 October 2024 has not been changed. Since MacGregor will be reported as part of discontinued operations, the MacGregor business has been removed from Cargotec’s 2024 outlook. The losses to be recorded as a result of the Transaction do not affect Cargotec’s outlook.
Cargotec Corporation
Board of Directors
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It’ll be interesting to see what the market reaction will be tomorrow. That price doesn’t sound too crazy at first glance, as McDonald’s seems to be doing better than before. Will the stock price go up as they get rid of the dead weight, or down because more was expected?
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It would be a surprise if the share price rose further from here. It has risen 37% in a year, and in addition, owners have received one Kalmar share for every share held, with a value of nearly €32 each. Taking this into account, the price increase is over 100% in a year.
I own Cargotec, but there should be some moderation, and that price for MacGregor isn’t exactly staggering. I get the feeling it was sold because it was promised, regardless of the price. By waiting, maybe a better price could have been achieved(?)
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A couple of weeks ago, I spent some time researching Cargotec, or rather the future Hiab. I didn’t end up buying, because as previous writers noted, the valuation has already risen significantly.
On the other hand, Hiab is an easy investment target after the separation of MacGregor. It is also somewhat of a rarity in its peer group (on the Helsinki Stock Exchange), as it is clearly a growth company. That is, organically as well.
Hiab is loaded with strong brands in Europe and America (Hiab, Jonsered, Multilift, Zepro, Moffett, Waltco, etc.), which we see every day in front of us at traffic lights and on highways. Also abroad. The company has also stated that inorganic growth is a strategic goal, and the current market, where there is only one other major player besides Hiab, supports such an objective. It also has a strong position in the USA, where it has stated it is investing.
A lot of good things. Surprisingly many. I wouldn’t sell either, even though volatility is certainly expected.
Edit. By the way, I came across this well-made video that tells about the company in an interesting way.
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Handelsbanken’s recent estimates (which are easy to agree with).
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Here are Eki’s comments on Cargotec’s announcement, in which it stated it has agreed to the sale of MacGregor.
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Juha Varis has also participated in this discussion.
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