Ali Group: $4.8bn EV Cross-Border Acquisition of Welbilt

Ali Group, funded in 1963 and wholly owned by the Berti family, is one of the largest global supplier specialized in the design, manufacturing and marketing of foodservice equipment with FY2020 revenues of c. €2bn and EBITDA of €338m (17% margin).

Welbilt is a US-listed company engaged in the design and manufacturing of food service equipment for refrigeration, ice making, cooking, food preparation and beverage dispensing, with c. $1.2bn of revenues and $169m of EBITDA (15% margin).

On 25th May Ali Group made an all-cash offer (the “Initial Offer”) to acquire 100% of the share capital of Welbilt for $23 per share, implying a Target Equity Value/EV of $3.3bn/$4.6bn. The Initial Offer followed the agreement – signed on 20th April – for the acquisition of the Target by Middleby (US-listed player operating in the foodservice equipment industry) in an all-stock transaction encompassing an exchange ratio of 0.124x Middleby share for each Welbilt share (implied Target EV of c. $4.3bn @ c. $20.5 per share) and providing to Welbilt shareholders a 24% stake in the combined entity (the “Middleby Offer”).

On 5th July Ali Group submitted a revised and binding offer (the “Final Offer”) to acquire in cash all outstanding shares of Welbilt for $24 p.s. at a valuation of $3.5bn/$4.8bn of Equity Value/EV, representing a premium of 11.4% to the implied value of the Middleby Offer and a premium of 53.6% to the closing share price on 20th April, the last trading day prior to announcement of the Middleby Offer.

Finally, on 14th July, Ali Group and Welbilt announced that they have entered into a definitive merger agreement under which Ali Group will acquire Welbilt based on the conditions of the Final Offer (the “Transaction”). The Transaction, which remains subject to customary regulatory conditions, including antitrust clearances and it is expected to close in 1Q22, would further improve Ali Group’s position in the US market, creating a global leading player in the foodservice equipment sector with over 90 brands, $3.9bn-eq. revenues o/w c. 50% in the US.

In such context, thanks to the intensive coverage effort by CIB M&A and Debt (DOT, LSF and Syndicate) divisions, Mediobanca, alongside Goldman Sachs, acted as Underwriter of the $4.5bn financing package put in place to guarantee Ali Group certainty of funds for the bid, committing $2bn+ across all the relevant acquisition facilities, including a TLA, a TLB, an RCF and a bridge facility. We have also been granted the role of Facility and Security Agent.

In the context of the acquisition, Mediobanca will also issue a fairness opinion in favor of Ali Group Board of Directors and is also actively working on several hedging transactions on FX and rates.

This is one of the largest underwriting mandates in the history of Mediobanca, which has been awarded to us as a result of our highly recognized structuring and syndication capabilities. Despite the intense competition from various national and international institutions, the client appreciated Mediobanca’s pragmatic yet tailored approach in combination with our ability to deliver on a tight schedule. The deal reaffirms Mediobanca as a core relationship bank of Ali Group and confirms Mediobanca’s proven ability to manage complex transactions in short timeframes. Moreover, it represents a milestone in strengthening Mediobanca’s primary role as leading debt provider in cross-border transactions.