Welbilt (WBT) gets acquired by Middleby Corp (MIDD)

Welbilt (WBT) gets acquired by Middleby Corp (MIDD)

Shares of Welbilt (WBT) surged when it announced that it is being acquired by Middleby Corp (MIDD).

Welbilt will be acquired by Middleby in an all-stock deal, bolstering the Middleby Commercial Foodservice network with a diverse range of products, brands, and technology.

The merged business will generate nearly $3.7 billion in revenue in 2020, with the Commercial Foodservice division accounting for 73 percent of total sales. Middleby will be well placed and capitalized to fund major R&D and potential investment prospects, thanks to its solid balance sheet and strong cash production.

Middleby has a long history of effectively acquiring firms, having completed more than 20 acquisitions since 2018, and a track record in driving efficiencies in acquired businesses.

Welbilt owners would acquire 0.1240x shares of Middleby common stock for each share of Welbilt common stock in an all-stock deal with an implied enterprise value of $4.3 billion, according to the terms of the arrangement.

The bid price is based on Middleby’s volume-weighted average price for the 30 trading days ending April 20, 2021 (Middleby’s 30-day VWAP), which is 28 percent higher than Welbilt’s 30-day VWAP. On a completely diluted basis, Middleby shareholders will control approximately 76 percent of the merged corporation and Welbilt shareholders will own approximately 24 percent.