COLUMBUS MCKINNON CORP

COLUMBUS MCKINNON CORP: Strategic Reshaping with Major Acquisition and Divestiture

Columbus McKinnon Corp (CMCO) is undergoing a significant strategic transformation, and investors need to understand the implications. This summary provides a clear breakdown of their latest decisions.

The Core Event: Kito Acquisition & DOJ Mandate CMCO will proceed with its substantial acquisition of Kito Crosby Limited ("Kito") for approximately $3.0 billion. This acquisition represents a game-changer, as CMCO aims to expand its global footprint and product offerings in the lifting and motion control industry. However, to secure approval from the U.S. Department of Justice (DOJ) and ensure fair competition, CMCO agreed to divest a specific part of its existing business: its U.S. power chain hoist and chain manufacturing operations.

CMCO publicly announced this resolution and agreement with the DOJ on February 2, 2026. CMCO reached the agreement to divest its U.S. operations in January 2026, following the initial Kito acquisition announcement in February 2025.

Why This Matters: Strategic Growth & Regulatory Hurdles CMCO's strategy is clear: accelerate growth and strengthen its market leadership by integrating Kito's complementary portfolio. Kito brings a strong presence in Asia and Europe, advanced hoist and crane technology, and a broader range of lifting solutions. CMCO expects these additions to create significant synergies and cross-selling opportunities across a wider global customer base.

However, the DOJ intervened, concerned that combining CMCO's and Kito's U.S. operations for power chain hoists and chains would reduce competition and potentially lead to higher prices or fewer choices for customers. To address this antitrust concern, CMCO agreed to divest its overlapping U.S. operations for approximately $100 million to a third party. This divestiture was a necessary step to unlock the much larger strategic benefits of the Kito acquisition.

Impact on CMCO's Business & Financials This dual transaction has a profound impact on CMCO:

• Enhanced Scale and Market Position: The combined CMCO-Kito entity will be a much larger, more diversified global leader in intelligent motion solutions, with an expanded product portfolio and geographic reach. This positions CMCO for stronger long-term growth.
• Financial Implications: The Kito acquisition, valued at $3.0 billion, will significantly increase CMCO's revenue and market share. However, while the divestiture of its U.S. power chain hoist and chain manufacturing operations generates $100 million, it will result in an estimated loss of approximately $30-40 million in annual revenue for CMCO. Investors should closely monitor future financial reports for updated guidance on the net impact on revenue, profitability, and debt levels, particularly regarding the financing required for the Kito acquisition.
• Integration Challenges: Merging two large, global companies like CMCO and Kito is complex. Risks include potential operational disruptions, cultural integration challenges, and the ability to realize the projected synergies and cost savings efficiently. Successful integration is crucial for the deal's long-term value creation.

Who's Affected?

• Investors/Shareholders: The market will weigh the long-term growth potential and synergies from Kito against the immediate financial impact of the divestiture and integration costs. Investors generally view the removal of regulatory uncertainty as a positive development.
• Employees: Employees in the divested U.S. operations will transition to the acquiring company. Kito and remaining CMCO employees will become part of a larger, global organization, potentially seeing new opportunities or roles within the expanded enterprise.
• Customers: A new supplier will now serve customers of the divested U.S. operations. Customers of the combined CMCO-Kito entity can expect a broader range of products, services, and potentially enhanced innovation as the companies integrate their offerings.
• Competitors: The industry landscape will shift, with a larger, more formidable CMCO-Kito entity competing globally, while the divested segment may see a new, focused competitor emerge.

What's Next for Investors? CMCO will now focus on closing both the Kito acquisition and the divestiture, followed by the critical phase of integrating Kito's operations. Investors should:

• Watch for Closing Dates: Expect official announcements on the final closing of both transactions, which will trigger the next phase of integration.
• Monitor Financial Guidance: Look for CMCO's updated financial outlook, including revised revenue projections, synergy targets, and earnings per share (EPS) guidance for the combined entity. Pay close attention to how the company plans to manage its debt from the acquisition.
• Assess Integration Progress: Keep an eye on management's commentary regarding integration milestones, cost savings realization, and cross-selling successes. These will be key indicators of the deal's long-term value.
• Understand the Net Impact: Evaluate whether the strategic benefits and synergies from Kito ultimately outweigh the revenue loss from the divestiture and the costs and risks of integration. This is a long-term play, and sustained performance will be key to validating this strategic shift.