Pitch Best MidCap Deal 2021: Infestos – Neways
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Name of the deal: Infestos Sustainability acquires Neways Electronics International
Date announced: 24-06-2021
Published value: 177,5 Million (€)
Buyer(s): Infestos Sustainability
Target: Neways Electronics International
Seller: Equity holders of Neways Electronics International N.V.
Involved firms and advisors buy side:
Kempen & Co (M&A advisory), Allen & Overy (Legal Advisory Corporate/M&A)
Involved firms and advisor's target:
ABN AMRO, AXECO Corporate Finance (M&A advisory), AKD (Legal Advisory Corporate/M&A)
Involved firms and advisors sell side:
n/a
Pitch
Brief description deal / Deal outline
Recommended all cash public offer by Infestos for the outstanding shares of Neways at an offer price of EUR 14.55 in cash (cum dividend) per share, representing a total consideration of approximately EUR 177.5m. The transaction represents a 65.3% to the average daily VWAP for the six-month period before the undisturbed share price.
Why should this deal win the Award for Best Deal MidCap 2021?
The transaction encompasses a very visible, complex public M&A transaction with two potential buyers, both being large shareholders, of which one is also a long-term respected partner and customer. All dynamics before and after the announcement of the deal received significant media attention given the listed nature of Neways. In addition, the transaction is a showcase in which interests of many different stakeholders needed to be taken into account, including majority and minority shareholders, customers, suppliers, employees, and the Boards of the Company. The announcement of the recommended cash offer by Infestos has been a result of a constructive and efficient dialogue between both Neways and Infestos, and their respective advisers. This resulted in a transaction which is in the best interest of Neways, the continued and sustainable success and long-term value of its business, and all of its stakeholders. The recommend cash offer by Infestos represents an aggregate equity value of approximately EUR177.5 million and a premium of 33.5% over the closing price of Neways on 29 April 2021.
With Infestos as strong majority shareholder, the transaction creates a stable governance structure, enabling the Company to advance the roll-out of its strategy. The offer reflects a compelling and immediate value for Neways’ shareholders, provides additional deal certainty due to the funds already committed and safeguards the interests of both customers and employees. Neways’ ambition is to outperform the core EMS competition, focusing on sustainable and profitable growth. Key to this is to transform into and act as a ‘System Innovator’ and the accelerated roll-out of Neways’ ‘One Neways’ strategy. Infestos intends to support Neways in the further development of leadership, craftsmanship and entrepreneurship in its operating companies. Infestos further acknowledges the importance of the continuing development of talent and technological expertise among Neways’ employees.
Infestos aims to keep the Company as much as possible the same. It shall not break up the Company, it will remain Neways’ headquarter, central management and its key support functions. Infestos supports and respects that Neways will maintain its corporate identity, values and culture.
The existing employee rights and benefits of Neways’ employees shall be respected by Infestos, including existing rights and benefits under their individual employment agreements and social plans. In addition, Infestos confirms its intention that Neways will remain prudently financed to safeguard the continuity of the business and the execution of its current strategy. Both VDL Groep and Infestos were interested in the acquisition of Neways’ shares, both of them already being large shareholders. VDL is also a supplier and customer of Neways. Even though VDL increased its initial non-binding proposal to EUR 13.00 per share (representing 19.3% above the undisturbed share price) with irrevocable support of the larger shareholders (representing 68.7% of the shares), Neways did not support the transaction. Having taken the interests of all stakeholders into account, including the announcement of VDL, the Boards have unanimously concluded that the offer of Infestos is significantly superior to the first proposal of VDL Groep, including price, non-financial, governance and other terms, and is in the best interest of Neways and all of its stakeholders.
Deal rationale:
Neways’ ambition is to outperform the core EMS competition, focusing on sustainable and profitable growth. Key to this is to transform into and act as a ‘System Innovator’ and the accelerated roll-out of Neways’ ‘One Neways’ strategy. Infestos intends to support Neways in the further development of leadership, craftsmanship and entrepreneurship in its operating companies. Infestos further acknowledges the importance of the continuing development of talent and technological expertise among Neways’ employees.
What is the impact of this deal on the company?
Infestos aims to keep the Company as much as possible the same. It shall not break up the Company, it will remain Neways’ headquarter, central management and its key support functions. Infestos supports and respects that Neways will maintain its corporate identity, values and culture.
What is the impact of this deal on the direct stakeholders?
The existing employee rights and benefits of Neways’ employees shall be respected by Infestos, including existing rights and benefits under their individual employment agreements and social plans. In addition, Infestos confirms its intention that Neways will remain prudently financed to safeguard the continuity of the business and the execution of its current strategy.
What is the impact of this deal on society?
Infestos, with its expertise, fully supports Neways in accelerating the ‘One Neways’ and ‘System Innovator’ strategy to become and remain a top-player in its industry, a life cycle partner to its customers and to lead with pride.
What was most complex about this deal?
Both VDL Groep and Infestos were interested in the acquisition of Neways’ shares, both of them already being large shareholders. VDL is also a supplier and customer of Neways. Even though VDL increased its initial non-binding proposal to EUR 13.00 pershare (representing 19.3% above the undisturbed share price) with irrevocable support of the larger shareholders (representing68.7% of the shares), Neways did not support the transaction. Having taken the interests of all stakeholders into account. Including the announcement of VDL, the Boards have unanimously concluded that the offer of Infestos is significantly superior to the first proposal of VDL Groep, including price, non-financial, governance and other terms, and is in the best interest of Neways and all of its stakeholders.
