JBT Marel (JBTM) M&A Announcement summary

Deal rationale and strategic fit

• Combination creates a leading global food and beverage solutions provider with complementary technologies, services, and software, enhancing customer value and operational efficiency.

• Both companies share a strong focus on innovation, sustainability, and customer-centricity, aiming to build a more sustainable food chain and transform food processing.

• The merger enables broader integrated solutions, deeper customer relationships, and improved service levels across resilient and growing markets, including protein, convenience foods, beverages, and pet food.

• The combined digital ecosystem will offer enhanced operational insights and predictive maintenance for customers.

• The new entity will leverage both companies' global reach and talent to drive innovation and attract top talent.

Financial terms and conditions

• Offer to acquire all outstanding shares of Marel, with shareholders able to elect cash, stock, or a mix, subject to proration; offer of €1.26 per Marel share in cash and 0.0265x JBT shares per Marel share.

• Consideration mix is approximately 65% stock and 35% cash, totaling about EUR 950 million in cash, with Marel shareholders holding around 38% of the combined company.

• Total equity value is ~€2.7B and enterprise value is ~€3.5B.

• Transaction expected to be accretive to cash EPS within the first year and deliver double-digit ROIC within five years.

• Financing includes a bridge loan, with plans for permanent financing via bank debt, term loans, and possibly fixed-rate instruments; pro forma net leverage expected to be <3.5x at 2024 year-end and well below 3.0x by 2025.

Synergies and expected cost savings

• Annual run-rate cost savings of over $125 million expected by year three post-close, with ~$70 million within 12 months.

• Cost of goods sold synergies to exceed $55 million by 2027, mainly from direct material and indirect spend savings, supplier consolidation, logistics, and plant optimization.

• Operating expense savings of over $70 million by year three, primarily from organizational streamlining and elimination of redundancies.

• Revenue synergies projected at over $75 million by year three, driven by integrated solutions, cross-selling, and geographic expansion.

• About 65% of synergies will require one-time costs to achieve.