The Middleby Corporation has entered into a definitive agreement to acquire the Taylor Company for $1 billion (£745m), in what is one of the largest mergers that the catering equipment sector has seen for some years.
Taylor is best known as one of the world’s largest suppliers of soft serve and ice cream dispensing equipment and also provides a range of beverage solutions and automated double-sided grills.
Its current owner, UTC Climate, Controls & Security, has agreed to offload the business to focus on its core transport and commercial refrigeration activities.
In the UK, Taylor is sold through Suffolk-based HTG Trading, also the UK distributor of Scotsman ice machines. HTG told FEJ that it was waiting to hear from Taylor’s factory before commenting on the implications of the deal for the UK market. The company said that once it knows more it intends to make a statement.
Middleby currently remains the industry’s most prolific consolidator having already snapped up Josper, Firex and JoeTap this year. However, the takeover of Taylor is by far and away the most significant in terms of scale and market intent.
Taylor will add around $315m (£235m) to Middleby’s top line based on its 2017 accounts, which also reveal that it achieved EBITDA of $65m (£48m). The company told shareholders it is targeting synergies in excess of $15m (£11m) from the acquisition and expects it to be EPS accretive within the first year of acquisition.
It will finance the all-cash acquisition under its existing revolving credit facility and anticipates tying it up in the third quarter, subject to regulatory approvals.
Selim Bassoul, chairman and CEO of Middleby, stated: “Taylor is a unique and premium brand in the commercial foodservice industry with leading positions in beverage, frozen dessert and grilling that are highly complementary to our existing offerings. Taylor products are well- represented across the top restaurant chains and have significant presence across all foodservice segments including quick serve, casual dining, retail, convenience stores, and institutional foodservice establishments. The acquisition further deepens our presence in these categories and with existing customers for new offerings in the kitchen.”
Middleby sees Taylor as a platform to further build on its portfolio of beverage solutions and complement its existing brands and technologies in this category. Beverage remains a key battleground for foodservice equipment companies, with rival Welbilt splashing out £160m for Crem International earlier this year.
“We believe Taylor is well-positioned for growth as customers continue to invest in and expand their beverage offerings. Additionally, there are significant technology synergies amongst Taylor and our existing related businesses, which should further add to the growth opportunities in this category,” continued Mr Bassoul.
Additionally, Taylor’s automated double-sided grill will expands Middleby’s already impressive cooking line-up with an advanced technology that provides customers with a specialised solution addressing labour savings, food safety and superior cooking performance.
“This acquisition enhances Middleby’s existing capabilities in automated cooking solutions and adds a critical technology as we further develop our portfolio of automated cooking solutions. We are very excited to have the Taylor management team and employees join the Middleby group of companies. The Taylor leadership team has deep industry experience and is highly respected by customers. This team has guided the company to strong levels of profitability and consistent financial performance over many years. We look forward to having them continue to lead the Taylor business, which will continue to operate from its existing facilities in Rockton, Illinois.”