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John Bean Technologies Corporation JBT shares scaled a new 52-week high of $127.40 on Wednesday before closing the session lower at $125.01. The upside was driven after the company announced on Nov. 28, 2024, that it received all remaining regulatory clearances necessary to proceed with its agreement to acquire Marel hf.
What’s Aiding John Bean’s Stock Performance?
JBT-Marel Combination Likely Set for January 2025: On June 24, 2024, JBT formally announced a voluntary takeover offer to purchase all issued and existing Marel shares. The transaction led to an overall consideration mix of 65% stock and 35% cash. Marel stockholders will receive €950 million in cash and own approximately 38% of the combined company. The combined company is expected to be named JBT Marel Corporation.
John Bean secured a formal confirmation from the Australian Competition and the Consumer Commission for the transaction on Nov. 22, 2024. The European Commission cleared the proposed transaction at the end of its Phase 1 review on Tuesday.
Unless the offer period is extended, JBT’s voluntary takeover offer will expire on Dec. 20, 2024.
If John Bean gains acceptance from at least 90% of Marel shareholders, JBT will pay the offer consideration to Marel shareholders within five Icelandic business days after the offer expires. The company, thus, expects the transaction to close no later than Jan. 3, 2025.
The proposed merger will unite the two renowned companies with complementary product portfolios, well-known brands and advanced technology. The combined company is expected to become a leading and diversified global food and beverage technology solutions provider.
Within three years of the completion of the transaction, the anticipated cost synergies are expected to exceed $125 million, driven by efficiencies in procurement, manufacturing, and general and administrative functions.
JBT Marel is also expected to realize additional revenue synergies of more than $75 million, given attractive cross-selling, go-to-market effectiveness, scaled innovation and enhanced global customer care capabilities. The deal is further anticipated to be accretive to earnings per share within the first full year of closing.
JBT’s Elevate 2.0 Strategy to Aid Growth: Under its Elevate 2.0 strategy, JBT continues to drive growth and margin expansion by capitalizing on the growth trends in the food and beverage processing industry. The industry is poised for continued growth supported by favorable underlying secular and cyclical trends.
Demand for digitally enabled customer-centric solutions, along with offerings that support automation and sustainability initiatives, has been on the rise. Also, during economic recessions as well as the pandemic-induced recession, the capital spending of food and beverage producers was not severely impacted compared with other sectors.
This indicates a stable demand scenario for the company. It plans to continue to introduce new products that support customers' needs for yield, capacity, automation and sustainability.
Solid Q3 Performance: John Bean reported adjusted earnings of $1.50 per share in third-quarter 2024, 35.1% higher than the prior-year quarter. Volume growth, gains from the company’s restructuring actions, supply-chain cost savings and lower net interest expenses were instrumental in driving the results in the quarter.
Revenues of $454 million increased 12.4% from the year-ago quarter. Backlog (from continuing operations) was $698 million at the end of the third quarter, up 1.3% year over year. Orders were up 10.5% year over year to $440 million.