BOXMEER, Netherlands — Marel has successfully closed the $540 million acquisition of Wenger Manufacturing LLC. The agreement to acquire Wenger, as announced on April 27 was subject to customary closing conditions which have been fully satisfied as of June 9, such as anti-trust and approval from Wenger’s shareholders.
Highlights of the transaction include:
- Wenger is to form a new business segment and fourth pillar of the business model in addition to poultry, meat, and fish, and part of segment reporting as of Q3 2022 financial results.
- The acquisition is expected to be margin and earnings enhancing, pro-forma the Wenger business is around 10 percent of Marel’s total revenues and 12 percent of combined EBITDA.
- With more than 500 employees located in close vicinity to Marel in Kansas in the U.S., Valinhos in Brazil, and Kolding in Denmark, Wenger’s revenues in 2022 are expected to be $190 million, EBITDA to be $32-35 million, and their EBIT margin has been between 14-15 percent in recent years.
- Total investment for the acquisition is $540 million and the transaction multiple corresponds to 14x EV/EBITDA adjusted for expected tax benefits of $60-70 million.
- Of the total investment, $530 million was the purchase price on a cash and debt free basis, paid with $526 million in cash and existing credit facilities, and 960,000 Marel shares. The remaining $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.
On a pro-forma basis, this new business segment accounts for around 10 percent of Marel’s total revenues. More than 60 percent of Wenger’s revenues derive from pet food where the company has a global leading position within its focus market segments. They have a strong foothold in the North American market and over 40 percent of revenues come from services, the companies noted.
The new segment will be run on a standalone basis, reporting to Arni Sigurdsson, chief strategy officer and executive vice president of Strategic Business Units. As of Q3 2022, this new platform will become part of Marel’s segment reporting alongside the poultry, meat, and fish business segments.
For more information, visit marel.com.