Columbus McKinnon Corporation has issued $1.225 billion of senior secured notes due 2033 to fund the pending $2.7‑$2.8 billion acquisition of Kito Crosby Limited and to refinance existing debt. The notes are sold to qualified institutional buyers under a Rule 144A offering and carry a special mandatory redemption clause that requires repayment by August 10 2026 if the acquisition does not close.
The financing package also includes a $1.325 billion term loan B, a $500 million revolving credit facility, and an $800 million convertible preferred equity investment from CD&R. In addition, Columbus McKinnon is selling its Series A cumulative convertible preferred shares to CD&R XII Keystone Holdings, L.P., a transaction that will provide further liquidity for the deal and related fees.
The Kito Crosby acquisition is intended to broaden Columbus McKinnon’s product portfolio and expand its market reach in the materials‑handling sector. Management expects the combined company to achieve higher operating margins through cost synergies, improved pricing power, and a more diversified customer base. The deal is projected to generate significant cash‑flow upside that will support the company’s deleveraging agenda.
Pro‑forma net leverage is expected to rise to roughly 9× at closing, a substantial increase from the current level. Columbus McKinnon has set a target of 3× net leverage within two years after the transaction. The higher leverage prompted S&P Global Ratings to downgrade the issuer’s credit rating to ‘B’ from ‘B+’, while maintaining a stable outlook based on the company’s cash‑flow generation and planned debt reductions.
Concurrent with the acquisition, Columbus McKinnon is divesting its U.S. power chain hoist and chain manufacturing operations for $210 million. The proceeds from this sale will be used to pay down debt and support the overall deleveraging strategy. The divestiture is part of a broader effort to streamline operations and focus on core growth areas.
The special mandatory redemption clause tied to the acquisition completion means that if the Kito Crosby deal does not close by the August 10 deadline, the notes must be redeemed at par. This provision protects investors and aligns the financing with the company’s strategic timeline. The market has not yet reported a reaction to the notes issuance, but analysts are monitoring the company’s leverage trajectory and the execution of the divestiture as key factors in assessing future credit risk.
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