The Shyft Group to Merge with Aebi Schmidt Group to Create A Specialty Vehicles Leader

Merger Overview - The Shyft Group and Aebi Schmidt Group announced a definitive agreement to combine in an all-stock merger, creating a leading specialty vehicles company [1] - The combined company is expected to generate 2024 pro forma revenue of approximately $1.95 billion and adjusted EBITDA of over$200 million, including synergies [1] - The transaction is expected to be EPS accretive in Year 1 and generate ROIC greater than the cost of capital by Year 3 post-close [1] Strategic Rationale - The merger combines Aebi Schmidt's specialty vehicle products and services with Shyft's manufacturing and upfit capabilities, creating a full-suite of offerings for customers [2] - The combined company will benefit from a scaled platform in the attractive North American market, representing approximately 75% of revenue, complemented by a strong European presence [4] - The merger brings together two highly complementary product suites, enhancing the ability to serve customers and drive outsized growth [4] Financial Benefits - The combined company expects to generate $20 to$25 million in annual run-rate cost synergies and an additional $5 million in adjusted EBITDA from near-term revenue synergies [4][5] - The transaction is expected to be accretive to EPS and generate ROIC above WACC by the first and third years post-close, respectively [5] - Pro forma net debt is expected to be approximately$485 million as of September 30, 2024 [5] Management and Governance - Barend Fruithof, current CEO of Aebi Schmidt, will serve as CEO of the combined company, while James Sharman, current Chairman of Shyft, will serve as Chairman [1][5] - The Board of Directors will consist of 11 directors, with five nominated by Shyft and six by Aebi Schmidt, seven of whom will be independent [6] - Aebi Schmidt majority shareholder Peter Spuhler will own approximately 35% of the combined company post-transaction [6] Transaction Details - The transaction is expected to close by mid-2025, subject to customary closing conditions and regulatory approvals [8] - The combined company will trade on NASDAQ and will be a Swiss-domiciled stock corporation with a strong presence in the US [7] - Shyft and Aebi Schmidt have secured fully-committed financing for the transaction [8] Company Backgrounds - The Shyft Group is a North American leader in specialty vehicle manufacturing, assembly, and upfit, with 2023 sales of $872 million and approximately 3,000 employees [12] - Aebi Schmidt Group is a global provider of smart solutions for clean and safe transportation surfaces, with 2023 net revenue of EUR 935 million and approximately 3,000 employees [13]