Edwards Group Agrees To Be Bought By Sweden's Atlas Copco For Up To $1.6 Bln

(RTTNews) - Edwards Group Limited (EVAC), a UK-based manufacturer of sophisticated vacuum products, Monday announced an agreement to be acquired by Swedish engineering company Atlas Copco AB (ATLCY.PK, ATLCF.PK) for up to about $1.6 billion, including the assumption of debt.

Under the merger terms, Atlas Copco's unit will acquire Edwards for a consideration of up to $10.50 per share, which includes a fixed cash payment of $9.25 at closing and an additional payment of up to $1.25 per share post-closing.

Edwards said the consideration depends on it achieving 2013 revenue within the range of 587.5 million pounds to 650 million ponds, and a related Adjusted EBITDA within the range of 113.9 million pounds to 145 million pounds.

The deal price represents a premium of approximately 11 to 26 percent to Edwards' 30 day average closing share price of $8.33 up to August 16, being the last trading day prior to the announcement. Edwards' initial public offering was priced at $8.00 per share.

In 2011, Edwards tried to float on the London stock exchange, but dropped the attempt due to market volatility. The company later listed on the Nasdaq stock exchange in May 2012. The shares closed Friday's session at $8.45, giving the company a market capitalization of $953.57 million.

Edwards, founded in 1919 in Crawley, makes higher-pressure vacuum pumps and related equipment that are vital to the technology used for making electronic components. The company's products are integral to manufacturing processes of semiconductors, flat panel displays, LEDs and solar cells. The company has over 3,200 full-time employees and 500 temporary workers operating in about 30 countries.

The merger has been unanimously approved by the Boards of Directors of both companies, and is subject to shareholder approval, antitrust clearance, and the other customary closing conditions. The transaction is expected to close in the first quarter of 2014.

Edwards said that about 84 percent of its shareholders have entered into voting agreements with Atlas Copco to vote in favor of the merger, subject to the conditions.

Edwards added that the benefits of greater scale, following the transaction, will help accelerate its growth strategy. Upon the deal closure, a new Vacuum Solutions Division will be formed within the Atlas Copco Compressor Technique business area, with headquarters in Crawley, UK.

Jim Gentilcore, Chief Executive Officer of Edwards, said, "On top of the cash payment at closing, analyst consensus for the full year and our strong start to the third quarter leads us to believe it is realistic for us to achieve the results that would deliver an additional cash payment towards the upper end of the range to our shareholders."

In Sweden, Atlas Copco shares are currently trading at 181.30 Swedish kroner, up 3.80 kroner or 2.14 percent.