Columbus McKinnon Targets $70M Synergies, Deleveraging After Kito Crosby Deal

Columbus McKinnon CFO John Linker said the company is focused on executing its integration of Kito Crosby, delivering planned cost synergies and reducing debt following the transformative acquisition. Linker, who joined the company July 1, told Sidoti conference attendees that the Kito Crosby transaction approximately doubled Columbus McKinnon’s pro forma revenue to about $2 billion. The combined company supplies intelligent motion solutions for material handling, including lifting, motion-control and conveyance products used across industrial and manufacturing environments. The company expects the combined business to generate EBITDA margins in the low 20% range on a pro forma basis including anticipated synergies, with an aspiration to reach the mid-20% range over the next several years, Linker said.

Columbus McKinnon has publicly committed to achieving $70 million in cost synergies from the Kito Crosby acquisition over three years. The company expects to realize 20% of that target during fiscal 2027 and said it was on track to meet or potentially exceed the first-year objective. Linker said early synergy actions have primarily involved selling, general and administrative savings, including lower headcount and the elimination of redundant vendor contracts. Larger savings opportunities tied to consolidating facilities, vendors, freight arrangements and material costs will require more time to flow through results, he said.

The company also sees potential revenue synergies because the two businesses have limited customer overlap. Columbus McKinnon plans to cross-sell products across their respective customer bases, combine sales and service organizations, harmonize sales incentives, improve digital go-to-market tools and invest in product innovation. Linker said revenue synergies were not a significant part of the company’s outlook for the current year or of Wall Street consensus expectations. Demonstrated progress in that area could become a future growth and deleveraging catalyst, he said.

During the company’s fiscal first quarter, consolidated orders increased, led by low-teens growth in the Americas. Linker said fiscal second-quarter orders were pacing toward year-over-year growth as the quarter neared completion, although at a slower pace than the first quarter. In Europe, the Middle East and Africa, first-quarter orders declined slightly from a year earlier amid softer economic conditions in Germany and geopolitical uncertainty in the Middle East. Linker said the company was seeing improvement during the second quarter and hoped the region would return to year-over-ye...