Middleby to acquire Welbilt in an all-stock transaction
The Middleby Corporation (MIDD) and Welbilt (WBT) have entered into a definitive agreement under which Middleby will acquire Welbilt in an all-stock transaction, enhancing the Middleby Commercial Foodservice platform with an attractive portfolio of products, brands and technologies.
This transaction will bring together two complementary businesses, accelerate the Middleby growth strategy into key markets globally and increase core capabilities in highly attractive segments.
The combined company will have approximately $3.7B in combined 2020 sales, 73% of which will come from the Commercial Foodservice segment.
Under the terms of the agreement, Welbilt shareholders will receive a fixed exchange ratio of 0.1240x shares of Middleby common stock for each share of Welbilt common stock in an all-stock transaction, with an implied enterprise value of $4.3B.
Based on Middleby’s volume-weighted average price during the 30 consecutive trading days ending April 20, the offer price represents a 28% premium to Welbilt’s 30-day VWAP.
Upon closing, Middleby shareholders will own approximately 76% and Welbilt shareholders will own approximately 24% of the combined company on a fully diluted basis.
The Boards of both companies have unanimously approved the transaction. In addition, Carl C. Icahn, Welbilt’s largest shareholder with an 8.4% ownership position, has entered into a support agreement in favor of the transaction.
Following closing, Timothy FitzGerald will continue as CEO and as a member of the Middleby Board of Directors. Bryan Mittelman will continue to serve as Middleby’s CFO.
Middleby will expand its Board to include two new directors from the Welbilt board, Chairperson Cynthia Egnotovich and William Johnson. Middleby intends to refinance Welbilt’s existing debt through its committed Senior Secured Facility.
Based on the expected pro forma leverage ratio at closing, the interest on the incremental financing would be approximately L + 162.5 bps.
The transaction is expected to close in late 2021, subject to customary closing conditions, including regulatory and Middleby and Welbilt shareholder approvals.
The Middleby Corporation designs, manufactures, markets, distributes, and services a range of foodservice, food processing, and residential kitchen equipment.
Welbilt, Inc., designs, manufactures, and supplies foodservice equipment for commercial foodservice market worldwide. The company offers commercial upright and undercounter refrigerators and freezers, blast freezers and chillers, and cook-chill systems under the Delfield brand; and walk-in refrigerators, coolers and freezers, and prefabricated cooler and freezer panels under the Kolpak brand.
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