Welbilt, Inc. (NYSE:WBT) shares rose Wednesday after The Middleby Corporation (NASDAQ:MIDD) announced plans to acquire the company.
Under the agreement, 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 $3.7 billion in combined 2020 sales, 73% of which will come from the Commercial Foodservice segment. With a strong balance sheet and robust cash generation, Middleby will be well positioned and capitalized to support significant R&D and future acquisition opportunities. Middleby has a long track record of successfully integrating businesses, having completed over 20 acquisitions since 2018, and has a history of driving efficiencies in acquired companies.
Creates a broad Commercial Foodservice Equipment platform with enhanced ability to serve customers through a combination of distinct but complementary portfolios with leading brands and broad geographic footprint.
Strengthens customer value proposition across hot-side, cold-side, beverage, technology and aftermarket support services across the globe.
Transaction accelerates R&D and investment into the value-added technologies and services of the future, including ventless cooking, controls, automation and connectivity
Wednesday’s news release also said $100 million of anticipated annual cost synergies associated with the transaction will be fully realized by year three, with additional potential from cross-selling opportunities and greater product development not yet quantified; Welbilt stand-alone Business Transformation Program annual improvement of $20 million is incremental
Shares in WBT leaped $3.59, or 23%, to $19.22, while those for MIDD subsided $3.83, or 2.3%, to $163.00.
