Marel, a leading global provider of advanced food processing equipment, systems, software, and services to the poultry, meat and fish industries, has signed an agreement to acquire Wenger Manufacturing LLC, a global leader in processing solutions focused on pet food, plant-based proteins, and aqua feed.
The acquisition of Wenger is a platform investment into new, complementary and attractive growth markets for Marel and will form the fourth business segment alongside poultry, meat and fish.
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The acquisition is subject to customary closing conditions such as anti-trust and approval of Wenger’s shareholders.
Key highlights of the acquisition:
- Platform acquisition adding a fourth business segment to Marel, in addition to poultry, meat and fish, and pro-forma, expected to contribute around 10% of Marel’s total revenues and 12% of EBITDA.
- Highly complementary product portfolios and geographic presence with Wenger’s industry-leading extrusion and dryer technology focused on the high growth markets of pet food, plant-based proteins and aqua feed.
- Founded in 1935, Wenger has 500 employees and revenues in 2022 are expected to be USD 190 million, EBITDA USD 32-35 million, and EBIT margin 14-15%.
- Total investment for the acquisition is USD 540 million and the transaction multiple corresponds to 14x EV/EBITDA adjusted for expected tax benefits of USD 60-70m.
- Pro-forma leverage following completion of the acquisition is estimated at around 3x net debt to EBITDA, in line with Marel’s targeted capital structure of 2-3x net debt to EBITDA.
- The acquisition is fully in line with Marel’s 2017-2026 growth strategy which targets 12% average annual increase in revenue through a balanced mix of organic and acquired growth.
A new business segment, based on the Wenger platform, will constitute Marel’s fourth pillar alongside poultry, meat and fish, and will be focused on the sizeable and attractive growth markets of pet food, plant-based proteins and aqua feed. On a pro-forma basis, this new business segment will account for around 10% of Marel’s total revenues and 12% of combined EBITDA.
This new growth platform is an important addition to Marel’s product portfolio to meet customers’ rising demand for high-quality food and feed that is processed in a sustainable and affordable way.
Marel has agreed to acquire Wenger Manufacturing LLC., including all relevant business activities of the group. The total investment for the acquisition is USD 540 million. Thereof, USD 530 million is the purchase price on a cash and debt-free basis (enterprise value). The remaining USD 10 million is a combination of a contribution to a not-for-profit private foundation, to continue the legacy of Wenger and its meaningful impact on the community, as well as Marel shares for Wenger employees.
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The purchase price will be paid with cash at hand and existing credit facilities. Discussion with selling shareholders regarding partial consideration in Marel shares is ongoing and will be concluded prior to closing. The transaction will also result in expected tax benefits of USD 60-70 million and the adjusted transaction multiple corresponds to around 14x EV/EBITDA.