Marel Food Systems hf., announces that it has entered into an agreement to
acquire the Stork Food Systems division of Stork N.V. The acquisition price is
EUR 415 million on a debt and cash-free basis.
Through the acquisition Marel Food Systems will double its revenues and
strengthen the platform for further internal growth and profitability.
The acquisition of Stork Food Systems will be an important step towards
achieving Marel Food Systems' target of becoming one of the leading global
innovators of food processing equipment. The businesses of Marel Food Systems
and Stork Food Systems are complementary, with no overlap in their product
portfolios.
The Structure of the Acquisition
• The transaction closure is subject to:
o London Acquisition's B.V., public offer for all outstanding shares in
Stork N.V., being declared unconditional.
o The advice of the Stork Works Council.
o Clearance from anti-trust authorities.
• Until the transaction is formally concluded, each company will continue to
operate independently.
• The purchase price for Stork Food Systems is EUR 415 million, additional
transaction costs are estimated to be EUR 20 million.
• Prior to this transaction, Marel Food Systems sold its 20% shareholding in
LME Eignarhaldsfélag ehf., reflecting the offering price of EUR 48.4 per
share in Stork N.V.
• The acquisition is fully funded by proceeds of sales of shares in LME
Eignarhaldsfélag ehf., an equity offering underwritten by Landsbanki, and
secured long term debt financing.
Landsbanki Corporate Finance acted as financial advisor and Allen & Overy in
Amsterdam as legal advisor to Marel Food Systems in the acquisition of Stork
Food Systems.
About Stork Food Systems
With headquarters in the Netherlands, Stork Food Systems operates companies in
the Netherlands, France, US, Spain and Brazil employing 1,875 people.
Stork Food Systems (SFS) has focused on developing advanced equipment for
poultry, meat and further processing in the protein industry. Last year, the
company Stork Food and Dairy Systems (SFDS) became a member of Stork Food
Systems. SFDS manufactures products for the dairy, juice and food processing
and pharmaceutical industries.
The overall turnover of SFS in 2007 is expected to be EUR 380 million, of which
EUR 310 million comes from the core activities in poultry, meat and further
processing and EUR 70 million from SFDS. The EBITDA is expected to be EUR 31
with earnings of EUR 41 million from poultry, meat and further processing,
offset by a loss of EUR 10 million for SFDS including restructuring cost of EUR
6 million.
In the last four years annual organic growth of core activities has been 14%,
driven by strong product development and expansion in emerging markets.
Profitability (EBIT) in that period has averaged 10%. SFS has been successfully
co-operating with Marel Food Systems in core activities for the past nine
years, developing turnkey solutions for the poultry processing industry.
In the dairy, juice, food processing and pharmaceutical industries SFDS has a
strong product portfolio in one of the fastest growing segments within the food
machinery industry. A new strategy was announced on 31 October 2007, after
these activities became part of Stork Food Systems. These activities are
expected to return a profit in 2008.
Benefits of the Acquisition
The major benefits for Marel Food Systems and Stork Food Systems include:
• Together Marel Food Systems and Stork Food Systems will have the critical
mass to enter new markets in Eastern Europe, Asia and South America, where
annual growth is expected to be over 7%.
• The larger unit can take advantage of:
o improved balance between protein segments, reducing business risks,
o economies of scale in production with emphasis on building up
production capacity in emerging markets,
o increased purchasing power in components, metals and electronics.
• Marel Food Systems and Stork Food Systems have successfully co-operated in
development and production of systems for the poultry industry where SFS's
strength in mechanical design is supported by Marel Food Systems' innovative
software and electronics systems. The previous co-operation will support a
successful integration between the companies and create value for customers.
Social Aspects
The transaction as such is not expected to adversely affect the existing
employment level and employment conditions of Stork Food Systems. Marel Food
Systems will respect all existing rights of company employees.
“At the beginning of 2006 we set ambitious growth targets for the next three to
five years,” says Arni Oddur Thordarsson, Chairman of the Board of Directors
for Marel Food Systems. “Within two years we have finalized two substantial
acquisitions and are now entering into the third one. We have also invested in
increased production capacity and marketing effort to support further growth.
We are projecting revenues over EUR 650 million for 2008 compared to EUR 129
millions in overall revenues in 2005. Our management and employees have shown
great determination during this transformation and worked hard towards the
successful integration of our businesses. Marel is now better positioned to
serve their global customers. Our emphasis now is to focus on internal growth
and increased profitability. We are grateful for the good support we have
received from our broad base of shareholders as well as from the financial
markets.”
“The strong innovation capabilities of Stork Food Systems make it a perfect
partner for Marel Food Systems,” says Dr. Hordur Arnarson, President and CEO of
Marel Food Systems. “Our good cooperation over the past decade has generated
great respect for our colleagues at Stork Food Systems and shown us the
potential for growth and success. The product portfolios of the two companies
are complementary with no overlap. We need size, constant innovation and a
global presence to succeed in our competitive industry. After the acquisition
we will be better equipped to enter emerging markets such as Asia, Eastern
Europe and South America. The step we have taken now will create an opportunity
for us to optimize our production capacity and technological efficiency.”
“We are pleased to join Marel Food Systems,” says Theo Hoen, President of Stork
Food Systems. “It has always been Stork Food Systems' mission to provide its
customers with innovative solutions to strengthen their competitive advantage
and to continue adding value to their production processes. Marel Food Systems'
continuous innovation and good reputation for reliable products in the
marketplace is therefore a perfect fit with Stork Food Systems. I also would
like to emphasize that Marel and Stork have worked together very successfully
for almost a decade. From our previous experience we feel that the two
companies have an excellent cultural fit.”
Analyst Meeting:
Marel Food Systems will hold a meeting for analysts and investors at its head
office at Austurhraun 9, Gardabaer, on 29 November beginning at 8:30 am (GMT).
Contact:
For further information, please contact Dr. Hordur Arnarson, President & CEO of
Marel Food Systems at tel. +354 563 8072.
About Marel Food Systems
Marel Food Systems is one of the world's most innovative manufacturers of
high-tech equipment for the food processing industry. The company provides
advanced systems to all segments of the food processing industry, increasing
the quality and value of fish, meat, poultry and other prepared food products
around the world. The company's innovative solutions - from single machines to
turnkey processing plants - always result in significant additional value for
processors, retailers and end consumers.
Marel Food Systems consists of four main business units that are complementary
to each other: Marel ehf. in Iceland, AEW Delford Systems Ltd in the UK,
Carnitech A/S in Denmark and Scanvaegt International A/S in Denmark. Marel Food
Systems operates in 24 countries and has a network of agents and distributors
covering over 40 countries worldwide. The company stays on the cutting edge by
investing far more than the industry average in research and product
development.
“We are innovative in everything we do and we provide outstanding new solutions
and services to the food processing industry in order to create greater value
for all our stakeholders.”