Equipment & Supplies

Middleby to acquire Welbilt for $2.9B

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April 21, 2021

The Middleby Corp. has agreed to acquire Welbilt, Inc. in an all-stock transaction, enhancing the Middleby commercial foodservice platform with additional products, brands and technologies, the companies announced in a press release.

The purchase price is approximately $2.9 billion in an all stock transaction, according to Reuters.

The combined business expands international operations, particularly in higher-growth regions across the globe and will drive $120 million in operational improvement with $100 million run-rate cost synergies and additional $20 million in Welbilt stand-alone business transformation program annual improvement, according to the press release.

The combined company will have approximately $3.7 billion in combined 2020 sales, 73% of which will come from the commercial foodservice segment.

The acquisition will deliver $100 million of anticipated annual cost synergies associated with the transaction to be fully realized by year three, with additional potential from cross-selling opportunities and product development.

"Today's announcement represents a milestone event for Middleby, Welbilt and the commercial foodservice equipment industry," Middleby CEO Timothy FitzGerald said in the press release. "The acquisition of Welbilt is a transformational opportunity for Middleby and a compelling combination that will benefit all of our stakeholders

"This transaction will allow Welbilt to accelerate our strategic development and represents an outstanding opportunity for Welbilt shareholders to realize an attractive value and participate in the future value creation of the combined organization," said William Johnson, CEO of Welbilt.

Under the terms of the agreement, Welbilt shareholders will receive a fixed exchange ratio of 0.1240x shares of Middleby common stock for each share of Welbilt common stock in an all-stock transaction, with an implied enterprise value of $4.3 billion.

Based on Middleby's volume-weighted average price during the 30 consecutive trading days ending April 20, 2021, the offer price represents a 28% premium to Welbilt's 30-day volume weighted average price. Upon closing, Middleby shareholders will own approximately 76% percent and Welbilt shareholders will own approximately 24% of the combined company on a fully diluted basis.

The boards of both companies have unanimously approved the transaction. In addition, Carl C. Icahn (and affiliates), Welbilt's largest shareholder with an 8.4% ownership position, has entered into a support agreement in favor of the transaction.

FitzGerald will continue as CEO and as a member of the Middleby board of directors. Bryan Mittelman will continue to serve as Middleby's CFO. Middleby will expand its board to include two new directors from the Welbilt board, chairperson Cynthia Egnotovich and Johnson.

The transaction is expected to close in late 2021, subject to customary closing conditions, including regulatory and Middleby and Welbilt shareholder approvals.

Middleby has completed over 20 acquisitions since 2018.