Vacuum and exhaust- abatement equipment maker Edwards Ltd of Crawley, UK and Atlas Copco Group, a Sweden-based provider of industrial productivity solutions, have entered into a definitive merger agreement in a transaction valued at up to approximately $1.6bn (approximately £1m), including the assumption of debt.
Under the terms of the merger agreement, a subsidiary of Atlas Copco will acquire Edwards for a per-share consideration of up to $10.50, which includes a fixed cash payment of $9.25 at closing and an additional payment of up to $1.25 per share post-closing, depending on Edwards' achievement of 2013 revenue within the range of £587.5m to £650m and achievement of a related Adjusted EBITDA target within the range of £113.9m to £145 million. The transaction is expected to close in Q1/2014.
Depending on the amount of any additional payment, the merger consideration represents a premium of approximately 11% to 26% to Edwards' 30 day average closing share price of $8.33 up to 16 August 2013, the last trading day prior to this announcement. Edwards priced its initial public offering on The NASDAQ Global Select Market on 10 May 2012 at $8.00 per share.
Edwards' shareholders representing approximately 84% of the current shares outstanding have entered into voting agreements with Atlas Copco to vote in favor of the merger, subject to the conditions set out in the voting agreements.
Jim Gentilcore, chief executive officer of Edwards, said, "This strategically and financially compelling transaction provides the opportunity for our stockholders to receive an attractive premium for their shares. On top of the cash payment at closing, analyst consensus for the full year and our strong start to the third quarter leads us to believe it is realistic for us to achieve the results that would deliver an additional cash payment towards the upper end of the range to our shareholders."
Ronnie Leten, president and CEO of Atlas Copco, said, "We recognize the strength of Edwards' people and products as well as their excellence in technology and innovation. We are excited that this professional company will join our Group."
The merger, which has been unanimously approved by the Boards of Directors of both companies, is subject to shareholder approval, antitrust clearance, and customary closing conditions.
Founded by F.D. Edwards in 1919, Edwards High Vacuum International became part of The BOC Group in 1968, and was named BOC Edwards in 1997. The Linde Group acquired The BOC Group in September 2006. In March 2007, Linde Group sold the component business (vacuum pumps and semiconductor equipment) of BOC Edwards for €685m (460m) to private equity firm CCMP Capital.
