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.