After Enodis, will Manitowoc lose taste for food?

By James B. Kelleher - Analysis

CHICAGO (Reuters) - Executives at diversified manufacturer Manitowoc Co Inc (MTW.N: Quote, Profile, Research, Stock Buzz) have spent a good deal of time in recent years justifying the company's curious mix of businesses, which they admit offer few benefits aside from smoothing out the ups and downs of their earnings.

But now, the need for those explanations may be coming to an end.

While other once-heavily diversified manufacturers such as Ingersoll-Rand Co Ltd (IR.N: Quote, Profile, Research, Stock Buzz) have divested units and acquired companies to focus their businesses, Manitowoc has steadfastly retained its unique portfolio of products -- which range from cranes for the construction and mining industries to ships for the U.S. Navy, to ice to beverage dispensers for the fast-food industry.

But after watching its planned purchase of Enodis Plc (ENO.L: Quote, Profile, Research, Stock Buzz) get derailed last week when Illinois Tool Works Inc (ITW.N: Quote, Profile, Research, Stock Buzz) offered more money for the U.K. maker of fast-food fryers, Manitowoc's top executive admitted his company was "in the process of retrenching, figuring out what our options are."

Analysts say one option may be to get out of the food service industry altogether -- the very business the Enodis deal would have significantly grown -- and to focus on cranes and shipbuilding, where some modest purchasing and personnel synergies exist.

Ben Elias, an analyst at Sterne, Agee & Leach Inc, points out that, even if the Enodis deal had gone through, Manitowoc probably would have been forced to make some food service- related divestitures to clear antitrust hurdles.

"If they were thinking about disposing of some food service assets if the acquisition went through, maybe they wouldn't be averse to spinning that out completely," he said.

Steve Khail, Manitowoc's spokesman, said the company could not comment on its M&A plans for this story.  Continued...