Chicago, Illinois-headquartered John Bean Technologies Corporation (JBT) has executed a definitive transaction agreement related to its previously announced intention to acquire all of the issued and outstanding shares of Garðabær, Iceland-based Marel hf, a manufacturer of food processing equipment used in the fish, poultry, and meat industries.
The deal, valued at approximately €3.6 billion ($3.9 billion), includes the terms of the offer and other important governance, social, and operating items relating to the proposed business combination of JBT and Marel.
JBT and Marel are continuing to work to finalize and submit a preliminary proxy statement/prospectus on Form S-4 with the United States Securities and Exchange Commission (SEC) as well as an offer document and prospectus with the Icelandic Financial Supervisory Authority of the Central Bank of Iceland (FSA), as required to move forward with the offer. Pending final approval by the FSA, JBT expects to launch the offer in May 2024. The deal is expected to close by the end of 2024, subject to regulatory clearance and applicable shareholder approvals.
“The execution of this transaction agreement represents a significant milestone in the process to combine JBT and Marel, creating a stronger business that will benefit shareholders, customers, and other stakeholders,” said Brian Deck, JBT’s president and chief executive officer. “The approval of the transaction agreement by the boards of directors of both companies is the result of highly collaborative work between the JBT and Marel teams. We both completed confirmatory due diligence, which reaffirmed the compelling industrial logic of the combination and the value creation for shareholders. This process has reinforced our confidence in the potential revenue synergies and further value creation opportunity.”
Acquisition Financing
JBT expects to partially utilize its existing cash on hand as well as a €1.9 billion fully committed bridge financing facility from Goldman Sachs and Wells Fargo to guarantee the funding of the cash portion of the transaction, pay off Marel’s outstanding debt, refinance JBT’s existing debt, and pay transaction fees and related expenses. The buyer expects to pursue a conventional long-term financing structure, which is anticipated to be consummated in connection with the closing of the deal.
Assuming a transaction close by year-end 2024, the combined company is expected to have a pro forma net leverage ratio of less than 3.5x at year-end 2024, which is prior to any synergies, and be well below 3.0x net leverage by year-end 2025, providing significant financial flexibility to the combined company to pursue further strategic initiatives.
