The Middleby Corporation today shook up the global foodservice equipment industry by announcing plans to acquire Welbilt in a deal worth $4.3bn (£3.08bn).
The duo have entered into a definitive agreement under which Middleby will take over Welbilt in an all-stock transaction.
Middleby said the transaction will bring together two complementary businesses, accelerate its growth strategy into key markets globally and increase core capabilities in highly attractive segments.
The combined company will have approximately $3.7bn in combined 2020 sales, 73% of which will come from the commercial foodservice segment.
With a strong balance sheet and robust cash generation, Middleby said it will be well-positioned and capitalised to support significant R&D and future acquisition opportunities.
Middleby has a long track record of integrating businesses, having completed over 20 acquisitions since 2018, and has a history of driving efficiencies in acquired companies.
The move is aimed at strengthening its customer value proposition across hot-side, cold-side, beverage, technology and aftermarket support services across the globe.
$100m of anticipated annual cost synergies associated with the transaction are to be fully realised by year three.
Middleby CEO Timothy FitzGerald stated: “Today’s announcement represents a milestone event for Middleby, Welbilt and the commercial foodservice equipment industry. The combination of our two great companies creates a leading player with a comprehensive product line, global footprint and advanced technologies and solutions that are well positioned to serve our rapidly changing customer needs and capitalise on emerging industry trends.
“The acquisition of Welbilt is a transformational opportunity for Middleby and a compelling combination that will benefit all of our stakeholders. We are excited to welcome the Welbilt team and we will benefit from the highly talented group they have assembled.”
William Johnson, CEO of Welbilt, said: “We are pleased to combine with Middleby to offer our customers a broad and innovative portfolio of products and technologies. This transaction will allow Welbilt to accelerate our strategic development and represents an outstanding opportunity for Welbilt shareholders to realise an attractive value and participate in the future value creation of the combined organisation. I am pleased to be joining the Middleby board of directors upon closing of the transaction to support a successful combination of the businesses.”