Strategic Review Update: Middleby to Separate Food Processing Business
into Standalone Public Company
Strategic Rationale for a Separation of Food Processing
As Part of a Comprehensive Assessment of its Portfolio, Middleby's Board of Directors Has Decided to Spin-off the Company's Food Processing Business
-
Next chapter of growth for highly successful but inherently different businesses that will benefit from a renewed focus on individual core strategies, driving a full valuation in line with best-in-classpeers for each entity
Provides greater exposure to and deeper understanding of each entity's standalone growth story, business - strategies, and performance, aligned with respective macroeconomic trends
- Enables each entity to have a unique, optimized capital structure and capital allocation policy in-linewith individual business models and strategic / operational priorities
- Enhances strategic and financial impact of M&A across each business entity
3
Separation Enables Focused and Capability-Aligned Companies with Best- in-Class Financial Profiles
REMAINCO
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$3.1bn |
$0.7bn1 |
~23%1 |
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2024A |
2024A Adj. |
Adj. EBITDA |
||
|
Revenue |
EBITDA |
Margin |
- Market-leadingbrands in kitchen equipment across Commercial and Residential end-marketsin both food and beverage
- Positioned to accelerate sales growth, capitalizing on next generation product innovation and differentiated go-to-marketinvestments
- Top-tiermargins and cash generation combined with further opportunities to scale in the market
- Significant upside in volumes and margin at Residential Kitchen through market recovery and realization of strategic investments
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$0.7bn |
$0.2bn1 |
~26%1 |
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2024A |
2024A Adj. |
Adj. EBITDA |
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|
Revenue |
EBITDA |
Margin |
- Fast growing and focused food processing market leader with a best-in-classfinancial profile
- Business will benefit from its own capital structure, investor base and acquisition currency
- Strong M&A pipeline and actionable organic initiatives support a significant growth opportunity and ability to quickly scale
- Founded on Middleby's culture, Food Processing can realize its long-term strategic vision with independence to fuel visible growth
With distinct identities, market leading companies are well positioned to accelerate growth
4
1 As reported in 2024A earnings release and excludes any allocation of corporate costs.
Middleby Food Processing
Creating a Standalone Leader in the Protein, Baking, and Snack Industries
Competitive Advantages
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1 |
Best-in-Class, end-to-end solutions for industrial protein, |
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bakery, and snack processors |
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2 |
Track record of long-term organic and acquisition driven |
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sales growth |
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3 |
Industry leading Adj. EBITDA margins at ~26%1 |
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4 |
Innovative automation technologies are in demand across |
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highly attractive end-markets |
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5 |
TAM expansion opportunities into adjacent food |
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applications such as snack, poultry, and pet food |
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Portfolio of Industry Leading Food Processing Brands…
…Trusted by Key Blue Chip Customers
5
1 As reported in 2024A earnings release and excludes any allocation of corporate costs.
Middleby Food Processing
Customer-Focused Innovation Leader with Long-term Industry Tailwinds
We Develop Innovative, Industry-leading
Processing Equipment Designed to . . .
ACCELERATE PROCESSING
IMPROVE THROUGHPUT
INCREASE YIELDS
RAISE PROFITABILITY
EXPAND CAPACITY
MORE PRODUCTION, LESS PEOPLE
REDUCE COSTS
OPERATING AND CAPITAL
MAXIMIZE SANITATION
SAFER DESIGN, EASIER CLEANING
MAINTAIN CONSISTENCY
HIGHER QUALITY
PRACTICE SUSTAINABILITY
TAKE ENVIRONMENTAL RESPONSIBILITY
6
Middleby Food Processing
Customer-Focused Innovation Leader with Long-term Industry Tailwinds
Delivering Innovation….
….Indexed to Favorable Industry Trends
Thermal Automation
Alkar Turbochef
- Only oven with microwave, convection, and steam functionality
- Up to 15% yield improvements with 35% less cooking time and 50% less wastewater
SlicingAutomation
Thurne One Bacon
- Dedicated, consistent high-performance slicer for turkey / belly bacon
- Unprecedented yield and throughput
End-to-endsolutions being powered by labor challenges and a greater need for automation
Minimizing cost of ownership while also maximizing finished product quality
Clean labels with longer shelf life drive enhanced adoption of best-in-class equipment solutions
PoultryAutomation
MP Equipment
Thoroughbreader
- No-compromise, 3-modebreader
- Achieves precise pickup control and significant breader savings
FryingAutomation
Micron-Pro
- Complete oil management solution
- Reduce waste, increase
operator safety, improve product quality
Food security creates a need for localization of processing plants around the world
Sustainability goals set by processors are forcing the adoption of food, water, and waste-related initiatives
7
Robust History of Food Processing M&A Has Created Leading Portfolio of Innovative Platforms and Brands…
Cumulative Food Processing Acquisitions
Resulted in FY24A Revenue of $731mm and
Adj. EBITDA of $187mm
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Expanded |
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Packaging |
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Capabilities |
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Entered |
17 |
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Baking Platform |
14 |
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13 |
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Expanded |
11 |
12 |
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Meat |
10 |
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Processing |
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8 |
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Unlocked |
Offerings |
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Food Processing |
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2 |
2 |
2 |
3 |
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1 |
1 |
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Added Washing / |
31 |
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Sanitation to |
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Customer |
27 |
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Extended |
Solutions |
26 |
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Automation |
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Capabilities |
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21 |
22 |
22 |
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20 |
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- ~$750mm in capital allocated to Food Processing M&A since 2005
- Industry Leading Food Processing platform created through 30+ strategic acquisitions of highly complementary brands and product innovations for targeted food applications
- Further synergies to be realized across the platform supporting future revenue growth and operational improvements
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Robust Pipeline with ~35 Targets
Representing ~$600mm of Adj. EBITDA
'05A '06A '07A '08A '09A '10A '11A '12A '13A '14A '15A '16A '17A '18A '19A '20A '21A '22A '23A '24A
|
Net Sales ($mm) $3 |
$55 |
$70 |
$79 |
$66 |
$108 |
$133 |
$252 |
$302 |
$323 |
$298 |
$342 |
$353 |
$390 |
$401 |
$437 |
$481 |
$574 |
$721 |
$731 |
|
Cumulative |
$30 |
$30 |
$48 |
$48 |
$48 |
$69 |
$153 |
$201 |
$201 |
$218 |
$228 |
$231 |
$311 |
$367 |
$439 |
$477 |
$477 |
$670 |
$690 |
$778 |
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Purchase Price1 |
8 |
1 Represents original purchase price, does not include cash returns from post-transaction operations.
…With Significant Value Created Through Proven Integration Expertise Impacting Both Revenue and Adj. EBITDA Growth
$ Millions
Acquisition A
|
4% |
22% |
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2005A Adj. |
2024A Adj. |
|
EBITDA Margin |
EBITDA Margin |
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$38 |
$73 |
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2005A Net Sales |
2024A Net Sales |
Acquisition B
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6% |
27% |
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2008A Adj. |
2024A Adj. |
|
EBITDA Margin |
EBITDA Margin |
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$25 |
$51 |
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2008A Net Sales |
2024A Net Sales |
Acquisition C
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15% |
25% |
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2022A Adj. |
2024A Adj. |
|
EBITDA Margin |
EBITDA Margin |
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$47 |
$62 |
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2022A Net Sales |
2024A Net Sales |
- Since 2005, Middleby Food Processing has acquired 30+ companies
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- Average Adj. EBITDA margin of ~11% at acquisition
- Average Adj. EBITDA margin of ~26%1 today, representing ~1,500bps of operationally driven margin expansion
Acquisition D
|
8% |
27% |
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2012A Adj. |
2024A Adj. |
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EBITDA Margin |
EBITDA Margin |
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$48 |
$100 |
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2012A Net Sales |
2024A Net Sales |
Acquisition E
|
10% |
40% |
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2015A Adj. |
2024A Adj. |
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EBITDA Margin |
EBITDA Margin |
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$14 |
$22 |
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2015A Net Sales |
2024A Net Sales |
Acquisition F
|
12% |
33% |
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2018A Adj. |
2024A Adj. |
|
EBITDA Margin |
EBITDA Margin |
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$16 |
$37 |
|
2018A Net Sales |
2024A Net Sales |
- Acquired businesses have grown topline at an average CAGR of ~4% since acquisition
- With enhanced scale and operational excellence, Food Processing acquisitions have flourished, positioning Middleby as an "acquirer of choice"
Strong track record of creating value through strategic M&A criteria and operational improvements
9
1 Excludes Q4 deals and any allocation of corporate costs.
Middleby Food Processing Financial Summary
Compelling Financial Profile to Deliver Sustained Value for Shareholders
'24A End-Market, Geographic & Channel Mix1
Poultry
Snack 5%
9%
Revenue2
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$ Millions |
MSD |
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~$1,000 |
|
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13% |
Adj. EBITDA3
$ Millions, % of Revenue
HSD
~$270
Latin
Protein
Bakery 49%
37%
|
$801 |
18%
|
$193 | 24% |
America
12%
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Asia |
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4% |
Aftermarket |
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Sales & |
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Aftermarket |
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U.S. and |
Service |
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Europe, |
33% |
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Canada |
33% |
ent |
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Mideast |
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57% |
Equipment |
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27% |
67% |
$401
$731
2019A 2024A 2028E
2024A Pro Forma for announced acquisitions
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$82 |
$187 |
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~27%+ |
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26% |
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21% |
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2019A 2024A 2028E
10
- Represents revenue, which includes intercompany sales that are currently eliminated in consolidation, unless otherwise stated.
- Includes intercompany sales that are currently eliminated in consolidation.
- As reported in 2024A earnings release and excludes any allocation of corporate costs.
Middleby RemainCo
Leading Kitchen Equipment Business
|
Competitive Advantages |
|
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1 |
Most innovative portfolio of cooking and beverage solutions |
|
2 |
Synergistic technologies across commercial and residential |
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platforms with a shared commitment to innovation |
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3 |
Strong Adj. EBITDA margin of ~23%1 driven by product innovation |
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providing customers transformational labor, safety, & quality gains |
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4 |
Accelerating growth into new, attractive markets such as ice and |
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beverage |
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5 |
Proven M&A playbook assembling "best-in-class" brand and |
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product offerings, creating industry-leading market position |
|
|
6 |
Significant upside in volumes and margin at Residential Kitchen |
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through market recovery and realization of strategic investments |
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Portfolio of Industry Leading Commercial and Residential Brands…
|
Commercial Foodservice |
Beverage / Ice |
|
Residential Kitchen
…Trusted by Key Blue Chip Customers
11
1 As reported in 2024A earnings release and excludes any allocation of corporate costs.
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Disclaimer
The Middleby Corporation published this content on February 25, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on February 25, 2025 at 13:25:14.882.
