Marel — M&A Activity 2016

Jan 29, 2016

Marel closes acquisition of MPS meat processing systems

Marel closes acquisition of MPS meat processing systems

Marel today announces that it has closed its acquisition of MPS meat processing
systems (MPS).

On November 21, 2015 Marel announced that the company had entered into an
agreement to acquire MPS meat processing systems. The purchase price is EUR 382
million on a debt and cash-free basis.

The closing of the acquisition was subject to anti-trust approvals that have
now been obtained without reservation. As a result, all the conditions for the
acquisition have been satisfied and the transaction has been closed today,
January 29, 2016.

Marel successfully completes the refinancing of its long term funding

As previously announced on November 21, 2015, parallel to the acquisition of
MPS, Marel entered into an approximately EUR 670 million all senior long term
financing agreement at favorable terms in line with current market conditions.
The all senior loan facilities, which have now replaced the prior senior/junior
structure, include a EUR 343 million term loan, a USD 105 million term loan as
well as a EUR 225 million revolving credit facility. The loans mature in
November 2020. Current interest terms are EURIBOR/LIBOR plus a margin of 275
basis points which will vary in line with Marel’s leverage ratio (Net
debt/EBITDA) at the end of each quarter. ABN Amro, ING and Rabobank acted as
Book-runner Mandated Lead Arrangers.

This financing provides Marel with strategic and operational flexibility to
support growth and value creation going forward. The financial position of
Marel remains strong and the leverage ratio is estimated to be in line with the
targeted capital structure of the company.

In relation to the closing of the acquisition, existing MPS shareholders,
including MPS management, invest approximately EUR 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 acquire is 10.8 million for the price of 213 ISK per
share or equivalent to EUR 1.51 per share.

Marel becomes a full-line supplier to the meat industry

United, the two companies will be at the forefront in developing full-line
solutions and equipment for the meat processing industry. They have a good
strategic and cultural fit with a highly complementary product portfolio and
geographic presence, creating a strong platform to enhance further growth.

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’ management, MPS has shown solid growth and profitability
in recent periods. Based on preliminary figures, MPS’s revenues and EBITDA for
the full year 2015 are slightly above the guidance communicated on November 21,
2015. MPS has one of the largest installed bases in the industry and a large
global base of customers.

The MPS acquisition enhances Marel’s position as a leading global provider of
advanced systems 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 contribute to a more balanced revenue split between industry segments
and geographies. On a pro-forma basis Marel’s meat segment will now contribute
to approximately 30% of revenue and EBITDA of Marel.

Marel's advisory cost associated with the MPS acquisition is EUR 3.3 million
and is fully accounted for in Q4 2015 results of Marel. The acquisition as well
as Marel’s new long term financing will be further introduced on the Investor
meeting on February 4, 2016 at 8:30 GMT, where the financial results for the
year 2015 will be presented.