Illinois Tool Works Inc. on May 8 announced that an agreement has been reached with the Enodis plc board of directors on the terms of a recommended $2.1 billion cash offer to purchase the entire issued and to be issued ordinary share capital of Enodis. The transaction also includes the assumption of Enodis' net debt, which was $210 million as of September 30, 2007, bringing the total fair market value to $2.3 billion.
Under the terms of the offer, Enodis shareholders will receive 280 pence in cash for each share. In addition, prior to the transaction becoming effective, Enodis will pay an interim dividend of 2 pence per share for the fiscal year ending September 30, 2008. The transaction is structured as a court-sanctioned scheme of arrangement under the laws of the United Kingdom. The transaction is subject to court approval in the U.K., the approval of Enodis shareholders, and traditional regulatory approvals in various jurisdictions. ITW expects the transaction to close in August 2008.
Enodis, a leader in the commercial foodservice equipment industry, had reported revenues of approximately $1.6 billion for fiscal year ended September 30, 2007. The company's extensive product line includes state-of the-art food equipment mainly for fast food restaurants, institutions and supermarket/grocery stores. Major products encompass cooking equipment, ice and beverage dispensing equipment, and stand-alone refrigeration as well as refrigerated display cases. Enodis' well known brand names include Frymaster, Garland, Lincoln, Scotsman, Convotherm and Kysor Warren.
ITW's existing food equipment businesses had revenues of $1.9 billion in 2007 and feature highly-regarded products primarily for casual dining restaurants, institutions and supermarket/grocery stores. Key products include warewashing equipment, cooking and food processing equipment, refrigeration equipment and ventilation and pollution control systems. ITW food equipment's leading brand names include Hobart, Vulcan, Traulsen, Avery Berkel and Bonnet. With more than 50 businesses in 23 countries, food equipment represented 12 percent of ITW's total company revenues in 2007.
"We strongly believe this cash offer brings significant value to Enodis' shareholders," said David B. Speer, chairman and chief executive officer. "The ITW offer represents a 9 percent premium to a competitive offer and a 56 percent premium to Enodis' average closing price for the 12 months ending April 8, 2008."
"We believe that the combination of ITW Food Equipment and Enodis will create an expanded global food equipment platform with very complementary strategic, operational and geographical growth positions," said Speer. "The collective businesses will have a significantly enhanced product portfolio in addition to greater scale to compete even more effectively and successfully in the global food equipment industry. As we have done in past acquisitions, we intend to operate Enodis as a stand-alone business group within the Food Equipment segment. We also recognize the importance of Enodis' workforce to our future success and look forward to welcoming them into ITW's food equipment group."
