John Bean (JBT) Submits Revised Proposal to Acquire Marel
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John Bean Technologies Corporation JBT has submitted a revised and significantly improved proposal to acquire all of the outstanding common stock of Marel hf. ("Marel"). This move aligns with JBT’s goal of making acquisitions that offer significant synergy potential, while maintaining a healthy balance sheet and strategic flexibility in the future.
In November 2023, JBT submitted a non-binding initial proposal to Marel hf. for a voluntary takeover.
The amended offer from JBT to purchase all of Marel's outstanding common stock is pegged at €3.40 per share (ISK511 per share, based on an ISK/EUR exchange rate of 150.3), which represents a 46% premium over Marel's unaffected closing share price on Nov 23, 2023. This offer is 17% higher than Marel's closing share price on Dec 13, 2023.
Headquartered in Iceland, Marel is a multi-national food processing company. It manufactures equipment and provides other services to the poultry, meat and fish industries.
John Bean received an irrevocable undertaking and entered exclusivity regarding shares owned by Eyrir Invest hf., which holds 24.7% of Marel’s shares.
The merger of JBT and Marel brings together two companies with complementary product portfolios, market-leading brands and cutting-edge technologies. Customers of both companies will benefit considerably from a broader range of processing capabilities, supported by a strong global network for aftermarket parts and services.
JBT aims for a mutually beneficial agreement with Marel at the earliest. However, the finalization of this transaction is subject to JBT's board of directors’ approval.
John Bean maintains a solid and disciplined balance sheet. Its free cash flow in the first nine months of 2023 was around $62 million. At the end of the third quarter of 2023, the company’s leverage ratio was 0.5X net debt to trailing 12 months’ pro-forma adjusted EBITDA due to the sale of AeroTech. The company achieved a 107% free cash flow conversion in the third quarter of 2023. It expects the conversion rate to be more stable going forward.
In 2022, John Bean introduced its Elevate 2.0 strategy, which is expected to drive continued growth and margin expansion for the company. It reported adjusted earnings of $1.11 per share in third-quarter 2023, 16% higher than the prior-year quarter. The figure beat the Zacks Consensus Estimate of 99 cents per share. High order levels, pricing actions and gains from the company’s restructuring actions were instrumental in driving the improved quarterly results.
Revenues in the third quarter were $404 million, increasing 1.2% from the year-ago quarter. A 3% contribution from acquisitions was offset by a 2% decline in organic revenues. The top line lagged the Zacks Consensus Estimate of $419 million.
