Marel hf. - Company Announcement

Marel agrees to acquire MPS meat processing systems- favorable long-term financing secured

Marel has agreed to acquire MPS meat processing systems for €382 million on a
debt and cash-free basis. Parallel to the acquisition Marel has entered into an
agreement of long term financing for the total Marel group for the amount of
close to €670 million at favorable terms and conditions. 

MPS is a global leader in primary processing solutions for the meat industry.
The two companies have a great strategic and cultural fit with highly
complementary product portfolios and geographic presence, creating a strong
platform to enhance further growth. 

The acquisition enhances Marel's position as the leading global provider of
advanced equipment and solutions to the poultry, meat and fish industries and
is fully in line with the company's previously announced growth strategy. This
step will support Marel's full line offering in the meat processing industry
and contribute to more balanced revenue split between industry segments and
geographies. On a pro-forma basis Marel's meat segment will contribute to
around 30% of revenue and EBITDA of Marel following the acquisition. 

MPS meat processing systems
MPS is a leader in primary processing solutions for the pork and beef industry
as well as in innovative solutions in water treatment and food logistics. Under
the leadership of MPS's management MPS has shown solid growth and profitability
in recent periods and it is estimated that 2015 revenue will be close to €150
million and EBITDA close to €40 million. MPS has one of the largest installed
bases in the industry and a large global base of customers. MPS is
headquartered in the Netherlands and has around 670 employees. The main
production sites of MPS are in the Netherlands and in China and it has a strong
sales and service network around the globe. 

Arni Oddur Thordarson CEO of Marel:
“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” 

Remko Rosman CEO of MPS meat processing system:
“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."

Completion of the acquisition
The completion of the acquisition is subject to anti-trust approvals and
closing is expected to take place in the first quarter of 2016. Both Remko
Rosman,CEO of MPS and David Wilson, Managing Director, Marel meat are
instrumental for the future of Marel. 

Existing MPS shareholders, including MPS management will invest around €16
million of their proceeds in Marel shares with a lock-up period of 18 months
from the date of closing. The number of shares they will buy is 10.8 million
for the price of 213 ISK per share. 


Long term financing for Marel secured
Parallel to the acquisition Marel has secured long-term senior financing
arranged by Rabobank. The approximately €670 million senior loan facilities has
maturity in November 2020 and its terms and structure in line with current
market conditions. 

The financing provides Marel with strategic and operational flexibility to
support growth and value creation going forward. 
The financial position of Marel will remain strong and leverage (Net
debt/EBITDA) ratio is estimated to be in line with the targeted capital
structure of the company. 

Investor meeting:

Marel will hold a meeting for analysts, media and investors on Monday, November
23, at 16:00 pm (GMT). 

For further information, contact:
Audbjorg Olafsdottir, Corporate Director of Investor Relations and
Communications, tel: (+354) 563 8626 / mobile: (+354) 853 8626.

Attachments:

Marel press release 21_nov _PDF.pdf