The "for sale" signs are being packed away at Columbus McKinnon Corp.
The Amherst materials handling equipment maker said Tuesday it won't put the company up for sale, as a group of dissident shareholders had wanted, but it will launch a restructuring program that could eliminate jobs and lead to plant closings or the sale of some product lines.
"We're going to be looking at the entire portfolio," said Robert L. Montgomery, Columbus McKinnon's executive vice president and chief executive officer.
Columbus McKinnon executives decided to focus on reshaping the company's operations after holding extensive discussions about selling or merging the firm, said Timothy T. Tevens, the company's president and chief executive officer.
Instead, Columbus McKinnon will focus on ways to streamline its operations and make them more profitable, which could include closing some plants and launching new, more efficient manufacturing methods, Tevens said.
The decision eliminates the immediate threat that the Buffalo area could lose one of its corporate headquarters through a sale or merger of the company. "I think it's a very positive thing for the company, for the employees and the communities served by the company, including Western New York," Montgomery said.
While Columbus McKinnon has identified several parts of its business that could benefit from dropping product lines or closing plants, Montgomery declined to say what they were. The restructuring also could involve the consolidation of some operations.
Tevens said the restructuring moves should produce significant savings and allow the highly-leveraged company to focus on paying down its $419 million in debt and also look for strategic acquisitions.
The decision caps a tumultuous 20-month period that began in early May 1999, when a group of dissident shareholders, led by Metropolitan Capital Advisors in New York City, launched a proxy fight to try to gain control of Columbus McKinnon's board of directors and force a sale of the company.
Shareholders rejected that bid, but the dissident group continued to pressure management to sell the company and take steps to drive up the price of Columbus McKinnon's stock.
At the same time, Columbus McKinnon's markets began to weaken and its recently-acquired business to design auto plant assembly lines started to falter, causing the company's profits to fall.
By January 2000, Columbus McKinnon had hired Bear Stearns & Co. to advise it on ways to drive up the value of its stock, including possibly selling the company. But that process proceeded slowly and continued into this year as the company's industrial markets weakened and the overall economy began to slow.
All that combined to make Columbus McKinnon less attractive to potential buyers and made it harder to put a deal together. "The economy has been poor. The financing markets have been very difficult," Montgomery said.
"In this market, the wind is against you," said Christopher A. Carosa, the manager of the Bullfinch Funds' Western New York Series mutual fund, which owns a small stake in Columbus McKinnon. "The market has changed a lot from two years ago."
Indeed, Columbus McKinnon's stock has tumbled by 63 percent since the dissidents launched their proxy fight, including a drop of 81 cents Tuesday to $7.88.
"Now they're going to have to wait for the market to cycle through," Carosa said.
"I'd rather see the company stay independent and stay in Western New York," he said. "If they can do that successfully, then great. If not, maybe they should maximize their shareholder's wealth."