Last week’s news that the Middleby Corporation is due to buyout Welbilt by the end of this year sent shockwaves through the catering equipment sector.
The merged entity will generate annual revenues of $3.7bn (£2.7bn), the largest manufacturing group in the industry.
So what do prominent distributors make of the deal at this early stage?
Barry Acton, group head of commercial strategy at Airedale Group, the UK’s largest catering equipment project and service firm, called the news “significant and exciting”.
Giving his initial thoughts on the deal, he said: “Middleby and Welbilt are two huge players and the merger will result in a combined business with an impressive suite of market-leading brands. I think it’s fair to say that in the UK context neither company has fulfilled anywhere close to its full potential yet.
“However the merger can only make the realisation of their strategic goals more achievable in the long term. We will be looking to get an idea of how and when the businesses will begin to align in the UK over the coming weeks.”
Acton said that in general Airedale has been consistent in its view that consolidation is needed in the catering equipment industry.
“Mergers and acquisitions will result in an acceleration of innovation, cost synergies and attract high calibre personnel to the foodservice sector. Ultimately, all of that will equal better products and service for end-users. We believe that businesses which entered the pandemic with strong balance sheets and took the correct measures to weather the storm over the past 12 months will be the ones that emerge in a position to capitalise on these M&A opportunities.”
Peter Farrell, sales director at leading Cheshire-based foodservice equipment distributor C&C Catering Equipment, is intrigued to see how the deal plays out given the scale of both sides.
“I don’t think many people saw that coming and it’s very unusual that news like that wasn’t leaked into the industry. It is two good companies with different end-users. Over the years I think Garland, Enodis, Welbilt lost their way somewhat with all the name changes; maybe now we will see their products featured more under Middleby.”
Jonathan Skinner, MD of Marshall Catering Equipment, said he is always receptive to significant supplier mergers as it should create opportunities for partners and customers further down the line.
“I like these huge mergers because when you get two great companies coming together, the chances are they will be able to take the positives from both and make some leaps forward in technology for the industry,” he explained.
“New product ranges, pricing structures and better back-up are all things I would expect – maybe even wider availability on products and spares! I am looking forward to the first rep visit so I can get a better picture of how the new-look company can benefit me as a supplier.”
Under the terms of the merger agreement, Welbilt will become an indirect, wholly-owned subsidiary of Middleby.
Upon completion of the merger, it is estimated that current Middleby shareholders will collectively own 76% of the outstanding shares of Middleby common stock, and current Welbilt shareholders will collectively own 24% of the outstanding shares of Middleby common stock.