John Bean Technologies Corporation JBT has announced that the Financial Supervisory Authority of the Central Bank of Iceland has granted an extension to its voluntary takeover bid for Marel. This will buy JBT and Marel more time to secure regulatory approvals to close the transaction.

John Bean’s takeover offer for Marel was previously set to expire on Sep. 2, 2024. It will now close on either Nov. 11, 2024 or three weeks after obtaining all regulatory clearances. 

The resulting entity, JBT Marel Corporation, will bring together two companies with complementary product portfolios, reputed brands and advanced technology.

JBT’s Acquisition Pursuit for Marel

Iceland-based Marel manufactures equipment and provides other services to the poultry, meat and fish industries. JBT had been trying to acquire Marel since November 2023. It had made the first offer to Marel at €3.15 per share, which it subsequently increased to €3.40 per share in December 2023. On Jan. 19, 2024, John Bean made an updated offer at €3.60 per share.

In April 2024, both parties signed a definitive transaction agreement at the offer price of €3.60 per share, which was also approved by the boards of directors of both John Bean and Marel.

On June 24, 2024, John Bean announced that Iceland's financial regulator had approved the offer document and prospectus related to the takeover bid for Marel.  On Aug. 8, JBT announced that its shareholders had voted in favor of the merger.

Financial Details of the John Bean-Marel Deal

Per the agreement, Marel shareholders will have a choice in how to receive payment for their shares. In exchange for each Marel share, they can opt for either all cash (€3.60 per share) or 0.0407 JBT shares. They can also opt for a mix of both (€1.26 in cash and 0.0265 JBT shares). The offer, set to expire on Sep. 2, 2024, has now been extended. 

Based on the proration feature and the agreed-upon John Bean’s reference share price of $96.25 per share, the final compensation mix is expected at 65% stock and 35% cash. Marel stockholders will receive €950 million in cash and own approximately 38% of the combined company.

JBT expects to use some of its existing cash on hand to finance the transaction. It will also use a €1.9 billion fully committed bridge financing facility to guarantee the funding of the cash portion of the transaction, pay off Marel's outstanding debt, refinance its existing debt and pay transaction fees and related expenses.

Synergy Potential for JBT Marel Corp

JBT Marel has the potential to become a leading and diversified global food and beverage technology solutions provider. It will be listed on Nasdaq Iceland, subject to approvals, alongside a NYSE listing.

JBT Marel will likely have proforma annual revenues of $3.5 billion and an adjusted EBITDA margin of around 16%. Within three years of the completion of the transaction, the anticipated cost synergies are expected to exceed $125 million, driven by efficiencies in procurement, manufacturing and general and administrative functions.

JBT Marel is also expected to realize additional revenue synergies of more than $75 million, given attractive cross-selling, go-to-market effectiveness, scaled innovation and enhanced global customer care capabilities. The deal is further anticipated to be accretive to earnings per share within the first full year of closing.

John Bean Stock’s Price Performance

John Bean’s shares have lost 9.2% year to date against the industry’s 20.9% growth.

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JBT’s Zacks Rank & Stocks to Consider

John Bean currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks from the Industrial Products sector are Mueller Water Products MWA, Northwest Pipe Company NWPX and Packaging Corporation of America PKG. Each of these companies currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Mueller Water Products’ 2024 earnings is pegged at 93 cents per share, which indicates year-over-year growth of 47.6%. The consensus estimate for earnings has gone up 17.7% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 64.1%. MWA shares have gained 45.1% year to date.

Northwest Pipe has an average trailing four-quarter earnings surprise of 20.15%. The Zacks Consensus Estimate for NWPX’s 2024 earnings is pinned at $2.96 per share, which indicates year-over-year growth of 41.6%. Estimates have moved 20.3% north in the past 60 days. The company’s shares have gained 48.4% so far this year.

The Zacks Consensus Estimate for PKG’s 2024 earnings indicates year-over-year growth of 0.1%. Packaging Corp has an average trailing four-quarter earnings surprise of 8.60%. Estimates have moved 4.6% north in the past 60 days. The company’s shares have gained 25.5% so far this year.

 

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