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Marel agrees to acquire MPS meat processing systems for €382m

Published 23 November 2015

Marel has agreed to acquire MPS meat processing systems for €382m on debt and cash-free basis.

Additionally, Marel has also inked a long term financing deal for the entire Marel group to the tune of €670m.

The two companies have entered into the acquisition agreement because they believe to have complementary portfolio and can capitalize on either's geographic expanse, thereby creating a strong platform for future growth.

The acquisition is intended to enhance Marel's market position as a provider of advanced equipment provider to poultry, meat and fish industries. The transaction is in line with the company's growth strategy.

The move is also aimed at complementing Marel's portfolio of offerings in the meat processing industry and help in gaining a more balanced revenue split between industry segments and geographies. Following the acquisition, Marel expects its meat segment to contribute to approximately 30% of revenue and EBDITA.

Marel CEO Arni Oddur Thordarson said: "MPS is a great complementary fit with Marel. We know each other well as we have been partners in several projects in the meat industry around the globe, where MPS has been delivering innovative and automated primary processing solutions and Marel has been delivering the secondary processing solutions with overarching software solutions. Together the companies are stronger and in the position to deliver full line solutions to Meat processors around the world.

The acquisition is fully in line with Marel's strategy to be at the forefront of delivering full line solutions to the Poultry, Meat and Fish industries globally. The combination of MPS and Marel is in many ways similar to the combination of Stork Food Systems and Marel, 8 years ago that has stimulated organic growth and resulted in great solutions and value to Marel's customers and shareholders."

MPS meat processing system CEO Remko Rosman said: "We are excited to become a part of Marel and find a long-term home for MPS and its employees. The complementary nature of our products and footprint and the strength of our combined brands enhance scale and full line offering. Marel and MPS have played an important role in defining the food processing industry and together we will be better positioned to invest in growth and innovation to add value to our current and future customers."

The acquisition requires anti-trust approvals and hence the transaction is expected to be completed in the first quarter of next year.

The transaction will receive investment of around €16m of proceeds in Marel shares from the current MPS shareholders, which includes the MPS management. The investment will be made with a lock-up period of 18 months from the date of acquisition process completion. They will buy 10.8 million shares for ISK213 ($1.6) per share.

Netherlands-based MPS has been a provider of processing solutions for the pork and beef industry. It also provides solutions for water treatment and food logistics. The company employs 670 people and its main production facilities are situated in China and Netherlands.

Earlier this year, foodservice equipment producer Middleby was to acquire high speed slicing business unit of Marel. The acquisition includes Marel High Speed Slicing business unit's assets and the manufacturing facility. On completion of the acquisition, Marel's products were to be rebranded under the original trademark Thurne. Middleby was to continue to manufacture the range of high speed slicers and integrated slicing systems.