Key Highlights:
- Full year 2023 preliminary earnings per share (EPS) in excess
of guidance (GAAP EPS: $4.00 - $4.10 and adjusted EPS: $4.05 -
$4.15) driven by strong operational execution; a discrete tax
benefit of approximately $0.33 per share favorably impacted GAAP
EPS
- Initiated strong preliminary 2024 guidance with continued
expected profitable growth and margin expansion
- JBT intends to launch a voluntary takeover offer in the first
quarter of 2024 to acquire all issued and outstanding shares of
Marel hf (Marel) at €3.60 per share, representing an enterprise
value of approximately €3.5 billion
- Will provide a flexible cash / stock consideration mix for
Marel shareholders, resulting in a total expected consideration mix
of approximately 65 percent JBT common stock and approximately 35
percent cash
- Combined company expected to generate annual run-rate cost
synergies of more than $125 million within three years post close,
with enhanced operational scale and double-digit return on invested
capital (ROIC) within four to five years post close
- Assuming a transaction close by the end of 2024, pro forma net
leverage ratio is expected to be less than 3.5x at year-end 2024,
which is prior to synergies, and well below 3.0x by the end of
2025, providing ongoing financial flexibility
- Proposed combined company anticipated to be named JBT Marel
Corporation and committed to a significant Icelandic presence
JBT Corporation (NYSE: JBT), a leading global technology
solutions provider to high-value segments of the food &
beverage industry, today reported continued, strong execution of
its Elevate 2.0 strategy with the intention to pursue a merger with
Marel by acquiring all of Marel’s issued and outstanding common
stock. Additionally, JBT announced preliminary, unaudited 2023
financial results that are expected to exceed prior guidance and
issued its 2024 guidance.
“We are pleased that JBT continues to demonstrate the resiliency
of our business as evidenced by our stronger than expected 2023
preliminary financial results along with continued, profitable
growth expected in 2024,” said Brian Deck, JBT’s President and
Chief Executive Officer. “Our results provide support to continue
to execute on our strategic priorities, including today’s
announcement regarding our intention to pursue a merger with
Marel.”
“A key priority of our Elevate 2.0 strategy is to deploy capital
to strategic mergers and acquisitions while maintaining financial
flexibility, and a merger with Marel would be an exciting and
transformational step in our journey,” stated Deck. “We believe
that the highly synergistic merger with Marel will create a
compelling platform to accelerate growth and provide meaningful
value to all JBT and Marel stakeholders.”
An investor presentation with supplemental information will be
available on the Company’s Investor Relations website at
https://ir.jbtc.com/events-and-presentations/presentations.
JBT’s Preliminary, Unaudited Full Year 2023 Financial Results
from Continuing Operations and 2024 Guidance
$ millions except EPS
Preliminary FY 2023
Prior FY 2023 Guidance
Preliminary FY 2024 Guidance
Revenue
$1,660 - $1,670
$1,660 - $1,680
$1,750 - $1,780
Income from Continuing Ops.
$128 - $131
$113 - $117
$154 - $167
Adjusted EBITDA
$272 - $275
$265 - $271
$295 - $310
Adjusted EBITDA Margin
16.4 - 16.6%
16.0 - 16.25%
17.0 - 17.5%
GAAP EPS
$4.00 - $4.10
$3.50 - $3.65
$4.80 - $5.20
Adjusted EPS
$4.05 - $4.15
$3.95 - $4.10
$5.05 - $5.45
Free Cash Flow Conversion
>100%
>100%
>100%
JBT expects 2023 financial results will exceed prior guidance
for income from continuing operations and adjusted EBITDA driven by
strong operational execution on sourcing actions and manufacturing
efficiencies, along with favorable mix from continued growth in
recurring revenue. Full year 2023 income from continuing operations
and GAAP EPS include a discrete benefit to the tax provision of $10
- $11 million, resulting from a reorganization and sale of a legal
entity during the fourth quarter of 2023. This beneficial impact
has been excluded from adjusted EPS.
For the fourth quarter 2023, JBT expects to report strong orders
of $410 - $420 million, and a year-end backlog of $670 - $680
million.
JBT also expects to deliver continued margin expansion and
consistent revenue performance for 2024. JBT’s preliminary 2024
guidance does not include any impact from the proposed Marel
transaction.
Compelling Strategic Rationale for Merger with Marel
A merger of JBT and Marel would create a leading and diversified
global food and beverage technology solutions provider by bringing
together two renowned companies with long histories and
complementary product portfolios, highly respected brands, and
impressive technology. The merger is expected to provide beneficial
outcomes for customers through expanded product offerings and
application knowledge, leveraged R&D capabilities, and enhanced
global customer care support, including a focus on improving
equipment uptime and efficiency through its comprehensive and
differentiated digital solutions, OmniBlu™ and Innova.
The combined company would also have an expanded global
footprint, which should allow global customers to more efficiently
access industry leading technology worldwide. Together, the
combined company is expected to continue to leverage the need for
automation solutions in the food and beverage industry and make a
greater impact on customer sustainability objectives by offering
solutions that provide more responsible use of the world’s precious
food, beverage, water, and energy resources.
Marel Offer Summary
JBT today announced its intention to launch a voluntary takeover
offer during the first quarter of 2024 for all of the issued and
outstanding shares in Marel at an offer price of €3.60 per share.
Such offer values the entire share capital of Marel at
approximately €2.7 billion and, inclusive of Marel’s net
indebtedness of approximately €0.8 billion as of September 30,
2023, represents an enterprise value of approximately €3.5
billion.
Based on an agreed exchange ratio for the JBT stock portion of
the consideration that utilizes a reference share price of $96.25
per share of JBT, the offer would result in Marel shareholders
receiving an aggregate of approximately €950 million in cash and
holding approximately a 38 percent ownership interest in the
combined company.
It is anticipated that Marel shareholders will have the option
to receive either cash, JBT common stock, or a combination thereof
in respect of their Marel shares. Elections will be subject to a
proration process such that the offer achieves a weighted average
mix of approximately 65 percent stock and approximately 35 percent
in cash.
Eyrir Invest hf., the largest shareholder in Marel with 24.7
percent of Marel’s share capital as of the date of this
announcement, has irrevocably undertaken to JBT to accept the offer
in respect of all of its shares in Marel.
“This announcement is a result of productive discussions between
the management of JBT and Marel,” added Deck. “We look forward to
working together on confirmatory due diligence and finalization of
the formal voluntary takeover offer on the terms outlined
above.”
The transaction is expected to close by year-end 2024.
Anticipated Financial Impacts
“The enhanced global operating scale of the combined company is
expected to generate meaningful operating cost synergies, and we
anticipate additional synergies from revenue to drive incremental
and compelling value creation,” stated Deck.
Operating efficiencies are expected to create meaningful cost
synergies of more than $125 million within three years following
the completion of the transaction across areas such as procurement,
manufacturing, and G&A. In addition, the combined company is
expected to benefit from additional revenue synergies given
attractive cross-selling, go-to-market effectiveness, scaled
innovation, and enhanced global customer care capabilities.
Assuming a transaction close by year-end 2024, the combined
company is expected to have a pro forma net leverage ratio of less
than 3.5x at year-end 2024, which is prior to synergies, and be
well below 3.0x net leverage by year-end 2025, providing
significant financial flexibility to the combined company to pursue
further strategic initiatives.
This transaction is consistent with JBT’s previously stated
M&A criteria, including expectations of accretion to cash EPS
within the first full year following completion of the merger along
with double-digit return on ROIC within four to five years post
close.
Governance and Commitment to Marel’s Heritage
The offer is expected to provide for proportional representation
on the combined company’s board for Marel shareholders based on pro
forma ownership in the combined company. Brian Deck will continue
as President and Chief Executive Officer of the combined company.
JBT is committed to collaborating with Marel to determine the best
talent to lead the combined organization, including key management
positions.
It is anticipated that the combined company would be named JBT
Marel Corporation. The combined company would maintain a long-term
commitment to Marel’s heritage, including a significant Icelandic
presence. The combined company would plan to maintain a corporate
headquarters in Chicago, Illinois with a European headquarters and
global technology center of excellence in Gardabaer, Iceland.
The combined company shares will have a secondary listing on
Nasdaq Iceland, subject to Icelandic regulatory approval, in
addition to continuing JBT’s listing on the NYSE.
“We have long admired Marel and are excited about combining our
companies to create a leading and diversified global food and
beverage technology solutions company,” stated Deck. “We are
committed to leveraging Marel’s culture of innovation excellence
and look forward to collaborating with the Marel team to build a
best-in-class talent organization.”
Offer Document and Conditions
Details of the offer, including all terms and conditions, will
be contained in an offer document to be sent to all eligible
shareholders in Marel following review and approval by the
Financial Supervisory Authority of the Central Bank of Iceland
pursuant to section XI of the Icelandic Takeovers Act no. 108/2007.
The offer document is expected to be approved for distribution by
the Icelandic Financial Supervisory Authority of the Central Bank
of Iceland during the first quarter of 2024.
The offer is expected to be subject to the fulfilment or waiver
by JBT of certain closing conditions including: (1) valid
acceptance of the offer from Marel shareholders representing a
minimum of 90 percent of the issued and outstanding share capital
and voting rights (on a fully diluted basis) of Marel; (2) receipt
of required regulatory clearances; (3) JBT shareholders approving
the issuance of JBT shares in connection with the transaction; and
(4) the favorable recommendation from the Marel Board of the
offer.
Assuming the 90 percent minimum acceptance threshold is met, JBT
intends to carry out a compulsory acquisition of the remaining
shares in Marel.
The offer will not be subject to any financing conditions.
Launch of the offer remains subject to confirmatory due
diligence, further negotiations, and board approvals of both Marel
and JBT. There is no assurance that agreement will be reached
between the parties or that an offer will be launched.
Transaction Advisors
Goldman Sachs Co LLC is acting as JBT’s financial advisor and
LEX and Kirkland & Ellis LLP are serving as legal counsel.
About JBT Corporation
JBT Corporation (NYSE: JBT) is a leading global technology
solutions provider to high-value segments of the food &
beverage industry. JBT designs, produces, and services
sophisticated products and systems for a broad range of end
markets, generating roughly one-half of its annual revenue from
recurring parts, service, rebuilds, and leasing operations. JBT
Corporation employs approximately 5,100 people worldwide and
operates sales, service, manufacturing, and sourcing operations in
more than 25 countries. For more information, please visit
www.jbtc.com.
Forward Looking Statements
This release contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and the Private Securities Litigation Reform Act of 1995,
and such statements are intended to qualify for the protection of
the safe harbor provided by the PSLRA. Forward-looking statements
are information of a non-historical nature and are subject to risks
and uncertainties that are beyond JBT’s ability to control. These
forward-looking statements include, among others, statements
relating to our business and our results of operations, a potential
transaction with Marel hf and our objectives, strategies, plans,
goals and targets. The factors that could cause our actual results
to differ materially from expectations include but are not limited
to the following factors: the completion of confirmatory due
diligence by JBT prior to launching the offer; the occurrence of
any event, change or other circumstances that could give rise to
the termination or abandonment of the offer; the expected timing
and likelihood of completion of the proposed transaction with
Marel, including the timing, receipt and terms and conditions of
any required governmental and regulatory approvals of the offer
that could reduce anticipated benefits or cause the parties to
abandon the transaction; the ability to successfully integrate the
businesses of JBT and Marel; the possibility that stockholders of
JBT may not approve the issuance of new shares of common stock in
the offer; the risk that Marel hf and/or JBT may not be able to
satisfy the conditions to the proposed offer in a timely manner or
at all; the risk that the proposed offer and its announcement could
have an adverse effect on the ability of JBT and Marel to retain
customers and retain and hire key personnel and maintain
relationships with their suppliers and customers and on their
operating results and businesses generally; the risk that problems
may arise in successfully integrating the businesses of Marel and
JBT, which may result in the combined company not operating as
effectively and efficiently as expected; the risk that the combined
company may be unable to achieve cost-cutting synergies or it may
take longer than expected to achieve those synergies; fluctuations
in JBT’s financial results; unanticipated delays or acceleration in
our sales cycles; deterioration of economic conditions, including
impacts from supply chain delays and reduced material or component
availability; inflationary pressures, including increases in
energy, raw material, freight, and labor costs; disruptions in the
political, regulatory, economic and social conditions of the
countries in which we conduct business; changes to trade
regulation, quotas, duties or tariffs; risks associated with
acquisitions or strategic investments; fluctuations in currency
exchange rates; changes in food consumption patterns; impacts of
pandemic illnesses, food borne illnesses and diseases to various
agricultural products; weather conditions and natural disasters;
impact of climate change and environmental protection initiatives;
our ability to comply with the laws and regulations governing our
U.S. government contracts; acts of terrorism or war, termination or
loss of major customer contracts and risks associated with
fixed-price contracts, particularly during periods of high
inflation; customer sourcing initiatives; competition and
innovation in our industries; difficulty in implementing our pure
play food and beverage business strategy; our ability to develop
and introduce new or enhanced products and services and keep pace
with technological developments; difficulty in developing,
preserving and protecting our intellectual property or defending
claims of infringement; catastrophic loss at any of our facilities
and business continuity of our information systems; cyber-security
risks such as network intrusion or ransomware schemes; loss of key
management and other personnel; potential liability arising out of
the installation or use of our systems; our ability to comply with
U.S. and international laws governing our operations and
industries; increases in tax liabilities; work stoppages;
fluctuations in interest rates and returns on pension assets; a
systemic failure of the banking system in the United States or
globally impacting our customers' financial condition and their
demand for our goods and services; availability of and access to
financial and other resources; and other factors described under
the captions “Risk Factors” and “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” in the
Company’s most recent Annual Report on Form 10-K filed by JBT with
the Securities and Exchange Commission and in any subsequently
filed Form 10-Q. JBT cautions shareholders and prospective
investors that actual results may differ materially from those
indicated by the forward-looking statements. JBT undertakes no
obligation to publicly update or revise any forward-looking
statements made by JBT or on its behalf, whether as a result of new
information, future developments, subsequent events or changes in
circumstances or otherwise.
Important Note regarding Preliminary, Unaudited 2023
Financial Results and Non-GAAP Language
JBT has not completed preparation of its financial statements
for the full year of 2023. The ranges presented in this news
release for the year ended December 31, 2023, are preliminary and
unaudited and are thus inherently uncertain and subject to change
as our customary year-end close and audit procedures are
completed.
JBT provides non-GAAP financial measures to increase
transparency in our operating results and trends. These non-GAAP
measures eliminate certain costs or benefits from, or change the
calculation of, a measure as calculated under U.S. GAAP. By
eliminating these items, JBT provides a more meaningful comparison
of our ongoing operating results, consistent with how management
evaluates performance. Management uses these non-GAAP measures in
financial and operational evaluation, planning and forecasting.
These calculations may differ from similarly titled measures
used by other companies. The non-GAAP financial measures disclosed
are not intended to be used as a substitute for, nor should they be
considered in isolation of, financial measures prepared in
accordance with U.S. GAAP.
Important Notices
This release does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. In particular, this
release is not an offer of securities for sale in the United
States.
Overseas Jurisdictions
The release, publication or distribution of this announcement in
or into jurisdictions other than Iceland and the Netherlands may be
restricted by law and therefore any persons who are subject to the
laws of any jurisdiction other than Iceland and the Netherlands
should inform themselves about, and observe, any applicable legal
or regulatory requirements. Any failure to comply with the
applicable restrictions may constitute a violation of the
securities laws of any such jurisdiction. To the fullest extent
permitted by applicable law, the companies and persons involved in
the offer to Marel shareholders disclaim any responsibility or
liability for the violation of such restrictions by any person.
This announcement has been prepared for the purpose of complying
with Icelandic law and the information disclosed may not be the
same as that which would have been disclosed if this announcement
had been prepared in accordance with the laws of jurisdictions
outside of Iceland.
Copies of this announcement and formal documentation relating to
the offer to Marel shareholders will not be, and must not be,
mailed or otherwise forwarded, distributed or sent in, into or from
any jurisdiction where local laws or regulations may result in a
significant risk of civil, regulatory or criminal exposure if
information concerning the offer is sent or made available to Marel
shareholders in that jurisdiction or any jurisdiction where to do
so would violate the laws of that jurisdiction and persons
receiving such documents (including custodians, nominees and
trustees) must not mail or otherwise forward, distribute or send
them in or into or from any such jurisdiction.
Note to U.S. Shareholders
It is important that U.S. shareholders understand that the offer
to Marel shareholders and any related offer documents are subject
to disclosure and takeover laws and regulations in Iceland that may
be different from the United States. To the extent applicable, the
offer to Marel shareholders will be made in compliance with the
U.S. tender offer rules, including Regulation 14E under the U.S.
Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and any exemption available to JBT in respect of securities of
foreign private issuers provided by Rule 14d-1(d) under the
Exchange Act.
Important Additional Information
No offer of JBT securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act or an exemption from registration. In connection with the
offer, JBT is expected to file a proxy statement with the SEC and
JBT may, upon launch of the formal offer, file with the SEC a
Registration Statement on Form S-4, which will contain a proxy
statement/prospectus in connection with the proposed offer.
SHAREHOLDERS OF JBT AND MAREL ARE URGED TO READ THE PROXY STATEMENT
(AND, IF APPLICABLE PROSPECTUS) AND OTHER DOCUMENTS THAT WILL BE
FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. JBT and
Marel shareholders will be able to obtain a free copy of the proxy
statement/prospectus (when available), as well as other filings
containing information about JBT, without charge, at the SEC’s
website, www.sec.gov, and on JBT’s website at
https://ir.jbtc.com/overview/default.aspx.
Participants in the Solicitation
JBT and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the holders of the
JBT’s common stock in respect of the offer to Marel shareholders.
Information about the directors and executive officers of JBT is
set forth in the proxy statement for JBT’s 2023 Annual Meeting of
Stockholders, which was filed with the SEC on March 31, 2023, and
in the other documents filed after the date thereof by JBT with the
SEC. Investors may obtain additional information regarding the
interests of such participants by reading the proxy
statement/prospectus regarding the proposed offer when it becomes
available. You may obtain free copies of these documents as
described in the preceding paragraph.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240118457339/en/
Investors & Media:
Kedric Meredith (312) 861-6034 kedric.meredith@jbtc.com
Marlee Spangler (312) 861-5789 marlee.spangler@jbtc.com
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