The Shyft Group, Inc. (SHYF), a motor vehicle manufacturing company, Monday announced a definitive agreement to combine in an all-stock merger with Swiss smart product systems and services firm Aebi Schmidt Group to create a specialty vehicles company positioned for outsized growth.
Shyft expects the transaction to be accretive to earnings per share. In the deal, Shyft shareholders will get 1.04 shares of the new company for each Shyft share they own. After the merger, Shyft shareholders will own 48% of the new company, and Aebi Schmidt shareholders will own 52%.
Peter Spuhler, Aebi Schmidt's main shareholder and a successful Swiss investor, will own about 35% of the combined company after the deal is completed.
The merged company is expected to drive long-term growth, improve profit margins, and generate stronger free cash flow.
For 2024, the company is projected to have an estimated revenue of $1.95 billion and an adjusted EBITDA of over $200 million, including synergies.
The boards of both companies have fully approved the tax-free transaction. The companies have arranged full financing for the combined company at closing, which is expected in mid-2025.
The merger will combine Aebi Schmidt's specialty vehicles, like snow and ice equipment, street sweepers, and agricultural solutions, with Shyft's manufacturing and upfitting for commercial and service vehicles. Both companies will offer a full range of products to their customers.
The deal creates a specialty vehicle company with a strong presence in North America, which makes up about 75 percent of its revenue, along with Aebi Schmidt's European operations.
Shyft and Aebi Schmidt anticipate generating annual run-rate cost synergies of $20 to $25 million through better cost management and improved operations. They also project an additional $5 million in adjusted EBITDA from expanding sales and reaching new markets. These synergies will be realized within the second year after the merger, leading to double-digit EBITDA margins for the combined company.
The Board of Directors will have five members from Shyft and six from Aebi Schmidt. Of them, seven will be independent members.
Barend Fruithof, Aebi Schmidt's CEO, will lead the combined company as CEO from the US, while Shyft Chairman James Sharman will be Chairman of the new Board. Shyft CEO John Dunn will stay on to ensure a smooth integration.
Friday, SHYF had closed 0.13 cents or 1.01% less at $12.72 on the Nasdaq. In the pre-market, SHYF is up 0.33 cents at $13.05.
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