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Belgium-based Tessenderlo Group and Picanol Group have declared their intention to merge their activities to form a single large industrial group. Both companies also aim for this integrated group to have one stock exchange listing and one board of directors. This will enable the existing shareholders of the two companies to participate directly in every new project.
In the framework of the proposed transaction, the reference shareholders Luc Tack and Patrick Steverlynck will contribute the shares they hold in Picanol Group in kind in Tessenderlo Group in the context of a voluntary public exchange offer made by Tessenderlo Group. By making a voluntary public exchange offer, the remaining Picanol Group shareholders (free float: 10.66 per cent) will also be offered the possibility to become direct shareholders of Tessenderlo Group at the same exchange ratio, whereby 1 Picanol Group share can be exchanged for 2.43 Tessenderlo Group shares, as per a joint press release issued by the two companies.
Tessenderlo Group and Picanol Group have declared their intention to merge their activities to form a single large industrial group. Both companies also aim for this integrated group to have one stock exchange listing and one board of directors. This will enable the existing shareholders of the two companies to participate directly in every new project.
Both Picanol Group and Tessenderlo Group have evolved significantly over the past few years, with each segment being greatly strengthened by strategic investments and with a new segment that was created by Tessenderlo Group (T-Power). Each business unit today contributes significantly to the adjusted EBITDA of the group and will also be able to develop further in the coming years with its own identity as part of an integrated group.
By combining the cash flows of all business units, acquisitions and investments can be made more easily across the economic cycles. By combining both groups into one industrial group, the existing shareholders of Picanol Group and Tessenderlo Group will have the opportunity to participate directly in each new project and there will no longer be a question of which group will realise which new project.
The goal is that after this transaction, Picanol Group will be an integral part of Tessenderlo Group and it will be included as a business unit in the machines and technologies segment. The integrated group will thus consist of the following five business segments: agro, bio-valorisation, industrial solutions, machines and technologies, and T-Power, the release added.
The new group will be active in more than 100 countries worldwide with a turnover of approximately €2.7 billion and an adjusted EBITDA of more than €430 million (based on the 2021 figures). It remains the ambition to strengthen the leading market position in each segment and ensure sustainable profitability.
The combined group will be able to count on more than 7,000 dedicated employees. The proposed transaction will have no impact on the current employment. Following the exchange offer, the Board of Directors will propose a dividend policy to the shareholders, taking into account the sustainable growth that is being pursued.
The strong Belgian anchoring of both companies will benefit the creation of shareholder value through the implementation of a long-term and sustainable industrial strategy
The boards of directors of both Picanol Group and Tessenderlo Group support the exchange offer. The board of directors of Tessenderlo Group will submit the issuance of new shares of Tessenderlo Group in Q4 2022 for approval at an extraordinary general meeting of Tessenderlo Group to be convened. The independent directors of Picanol Group have, in accordance with the Royal Decree on Takeover Bids, appointed Degroof Petercam as an independent expert to prepare an expert report on the proposed exchange ratio in the exchange offer.
On December 16, 2015, the two companies had already announced a proposal to combine the industrial activities of both companies into one larger industrial group. To this end, the industrial activities of Picanol Group would be contributed to Tessenderlo Group while maintaining a dual stock exchange listing. However, after thorough consideration, the Board of Directors of Picanol Group concluded at that particular time that there was insufficient support in the market to successfully conclude the transaction.
Tessenderlo Group is valued for the purposes of the exchange offer at €1,656 million in relative terms while Picanol Group (including its 15.2 per cent shareholding in the Swiss publicly traded Rieter Holding AG – after the contribution in kind of the 3.8 per cent shareholding in Rieter Holding AG by Symphony Mills – and excluding the shares it holds in Tessenderlo Group) is valued at €830.8 million in relative terms.
The reference shareholders (Luc Tack and Patrick Steverlynck) will hold 64 per cent of the total number of shares in the new group after the contribution of their stakes in Picanol Group in the context of the exchange offer and taking into account the stakes that they already hold in Tessenderlo Group.
Upon completion of the proposed transaction, all activities of Tessenderlo Group and Picanol Group will be combined within one listed company, Tessenderlo Group nv. The Tessenderlo Group headquarters will remain in Brussels (Belgium), while the headquarters of Picanol Group will remain in Ieper (Belgium).
After completion of the intended transaction, it will be the intention in due course to maintain only one stock exchange listing for Tessenderlo Group and to delist the Picanol Group share.
It is the intention of both parties for the integration to become effective as of January 1, 2023.
Fibre2Fashion News Desk (NB)
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