JBT Corp. Signs Definitive Deal with Marel hf. for Takeover Offer Launch

JBT Corporation (NYSE: JBT), a prominent global provider of technology solutions for high-value sectors within the food and beverage industry, has officially announced the execution of a definitive transaction agreement with Marel hf. (ICL: Marel), a key player in the industry. This agreement is in line with JBT’s previously declared intention to make a voluntary takeover offer for all outstanding shares of Marel. The transaction agreement, which has received approval from the Boards of Directors of both companies, encompasses the terms of the offer along with crucial governance, social, and operational aspects concerning the proposed merger of JBT and Marel.

Both JBT and Marel are diligently working towards finalizing and submitting a preliminary proxy statement/prospectus on Form S-4 with the U.S. Securities and Exchange Commission (SEC), as well as an offer document and prospectus with the Icelandic Financial Supervisory Authority of the Central Bank of Iceland (FSA), which are prerequisites for launching the offer. Pending final approval by the FSA, JBT anticipates launching the offer in May 2024. The transaction is slated to conclude by the end of 2024, subject to regulatory clearance and requisite shareholder approvals.

Brian Deck, President and Chief Executive Officer of JBT, commented on the significance of this agreement, stating, “The execution of this transaction agreement represents a significant milestone in the process to combine JBT and Marel, creating a stronger business that will benefit shareholders, customers, and other stakeholders.” Deck highlighted the collaborative effort between the teams of JBT and Marel, emphasizing the reaffirmed industrial logic of the merger and the value it will generate for shareholders.

Key Points of the Marel Offer:

The economic terms of the offer align with JBT’s previous announcement on January 19, 2024. Marel shareholders will have the option to receive either all cash, all JBT common stock, or a combination of both, for each Marel share. The estimated consideration mix will be 65 percent stock and 35 percent cash, resulting in Marel shareholders receiving approximately €950 million in cash and holding around a 38 percent ownership stake in the combined entity. JBT intends for the combined company to remain listed on the New York Stock Exchange (NYSE) and plans to submit a secondary listing application for a portion of JBT’s common stock on Nasdaq Iceland, giving Marel shareholders the choice to receive shares listed on either exchange. Eyrir Invest hf., Marel’s largest shareholder, has committed to accepting the offer for all of its shares in Marel. Key Highlights of the Transaction Agreement:

The agreement encompasses comprehensive negotiated terms and conditions, including efforts to obtain regulatory approvals, cooperation in preparing necessary documents, and mutual representations, warranties, and covenants. Brian Deck will serve as CEO of the combined company, with Arni Sigurdsson appointed as President. The executive leadership team will comprise talent from both companies. The combined company’s Board of Directors will consist of independent directors from both JBT and Marel, with Alan Feldman as Chairman. A commitment to a significant Icelandic presence and the preservation of Marel’s heritage will be upheld, with the combined company named JBT Marel Corporation and Marel’s facility in Gardabaer, Iceland designated as JBT’s European headquarters and a global technology center of excellence. Acquisition Financing:

JBT plans to utilize its existing cash along with a fully committed bridge financing facility of €1.9 billion from Goldman Sachs and Wells Fargo to fund the cash portion of the transaction, retire Marel’s outstanding debt, refinance JBT’s existing debt, and cover transaction fees and expenses. A conventional long-term financing structure is expected to be pursued, with the combined company projected to have a pro forma net leverage ratio of less than 3.5x by year-end 2024 and well below 3.0x by year-end 2025, providing significant financial flexibility. Upcoming Conference Call Schedule:

JBT anticipates hosting a conference call in early May to discuss its first quarter 2024 financial results and the planned offer, followed by a transaction-specific conference call promptly after the offer is launched. Transaction Advisors:

Goldman Sachs Co LLC is acting as JBT’s financial advisor, with Kirkland & Ellis LLP and LEX serving as legal counsel. Arion banki hf. is JBT’s lead manager for the Icelandic offer and is advising on the Icelandic listing.

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