Investors

Marel closes acquisition of MPS

29 Jan 2016

Marel today announces that it has closed its acquisition of MPS meat processing systems (MPS).

MPS meat processing systems logo On November 21, 2015 Marel announced that the company had entered into an agreement to acquire MPS meat processing systems. The purchase price is EUR 382 million on a debt and cash-free basis.

The closing of the acquisition was subject to anti-trust approvals that have now been obtained without reservation. As a result, all the conditions for the acquisition have been satisfied and the transaction has been closed today, January 29, 2016.

Marel successfully completes the refinancing of its long term funding
As previously announced on November 21, 2015, parallel to the acquisition of MPS, Marel entered into an approximately EUR 670 million all senior long term financing agreement at favorable terms in line with current market conditions. The all senior loan facilities, which have now replaced the prior senior/junior structure, include a EUR 343 million term loan, a USD 105 million term loan as well as a EUR 225 million revolving credit facility. The loans mature in November 2020. Current interest terms are EURIBOR/LIBOR plus a margin of 275 basis points which will vary in line with Marel’s leverage ratio (Net debt/EBITDA) at the end of each quarter. ABN Amro, ING and Rabobank acted as Book-runner Mandated Lead Arrangers.

This financing provides Marel with strategic and operational flexibility to support growth and value creation going forward. The financial position of Marel remains strong and the leverage ratio is estimated to be in line with the targeted capital structure of the company.

In relation to the closing of the acquisition, existing MPS shareholders, including MPS management, invest approximately EUR 16 million of their proceeds in Marel shares with a lock-up period of 18 months from the date of closing. The number of shares they acquire is 10.8 million for the price of 213 ISK per share or equivalent to EUR 1.51 per share.

Marel becomes a full-line supplier to the meat industry
United, the two companies will be at the forefront in developing full-line solutions and equipment for the meat processing industry. They have a good strategic and cultural fit with a highly complementary product portfolio and geographic presence, creating a strong platform to enhance further growth.

MPS is a leader in primary processing solutions for the pork and beef industry as well as in innovative solutions in water treatment and food logistics. Under the leadership of MPS’ management, MPS has shown solid growth and profitability in recent periods. Based on preliminary figures, MPS’s revenues and EBITDA for the full year 2015 are slightly above the guidance communicated on November 21, 2015. MPS has one of the largest installed bases in the industry and a large global base of customers.

The MPS acquisition enhances Marel’s position as a leading global provider of advanced systems and solutions to the poultry, meat and fish industries and is fully in line with the company’s previously announced growth strategy. This step will contribute to a more balanced revenue split between industry segments and geographies. On a pro-forma basis Marel’s meat segment will now contribute to approximately 30% of revenue and EBITDA of Marel.

Marel’s advisory cost associated with the MPS acquisition is EUR 3.3 million and is fully accounted for in Q4 2015 results of Marel. The acquisition as well as Marel’s new long term financing will be further introduced on the Investor meeting on February 4, 2016, where the financial results for the year 2015 will be presented.

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