Food processing equipment manufacturer Marel has entered an agreement to acquire Sabetha, Kansas, U.S.A-headquartered Wenger Manufacturing, a provider of processing solutions to the pet food, plant-based protein, and aquafeed sectors, saying the move is “a platform investment” into "new, complementary and attractive growth markets.”
The USD 540 million (EUR 513.2 million) acquisition, which is subject to closing conditions such as antitrust and approval of Wenger’s shareholders, will also form Marel’s fourth business segment, alongside poultry, meat, and fish.
Marel expects the new segment to contribute around 10 percent of its total revenues and 12 percent of its EBITDA.
“We are thrilled to join forces with the great team in Wenger with whom we have a strong strategic and cultural fit,” Marel CEO Arni Oddur Thordarson said.
“Wenger is a true leader in its field of providing solutions and services to the pet food industry and aqua feed industries, and has in recent years, made its mark on the fast-growing plant-based protein consumer market with best-in-class solutions positioned right in the center point of the value chain," Thordarson said. “Marel has a strong financial position to pursue future growth avenues and a proven track record in driving long-term value creation. I am confident Marel will be a good steward for the Wenger business, its talented team and continued local community engagement, and we remain committed to our continued future success."
Founded in 1935, family-owned Wenger has 500 employees. Its revenues in 2022 are expected to be USD 190 million (EUR 180.6 million), its EBITDA is estimated to come in at USD 32 million to USD 35 million (EUR 30.4 million to 33.3 million). Wenger Chairman Trevor Angell said the partnership with Marel will bring Wenger more opportunities worldwide.
“Marel has invested significantly in its global reach and digital platform, which will improve Wenger’s ability to be the partner of choice for our clients throughout the long lifecycle of our equipment. Further, our dedicated team will be joining a large, healthy, international organization where they can grow and see increased opportunities," Angell said. “During our interaction, it was apparent that there is great strategic and cultural alignment between Wenger and Marel. Our shared values and vision, our care for customers and employees, and the combined technical strengths of the two companies will create tremendous value in global food production.”
Marel estimates the global petfood and aquafeed markets to be worth over EUR 100 billion (USD 105.2 billion) and EUR 50 billion (USD 52.6 billion) respectively and growing at 5 to 6 percent annually, while the plant-based protein market is currently around EUR 7 billion (USD 7.4 billion) and expected to grow 15 to 20 percent annually.
It said the addressable market for the two companies in solutions and services within petfood, plant-based proteins, and aquafeed sectors is around EUR 2 billion (USD 2.1 billion) with expected annual growth of 4 to 6 percent.
The acquisition will be financed through Marel’s balance sheet and existing credit facilities, it said. To preserve operational headroom, Marel has signed a EUR 150 million (USD 157.8 million) bridge facility from BNP Paribas Fortis SA/NV.
Photo courtesy of Marel
