Shyft Shares Soar with Merger Agreement
Investing.com-- The Shyft Group (NASDAQ: SHYF) shares rose by 20% today following the announcement of a definitive agreement to merge with European firm Aebi Schmidt Group in an all-stock transaction. The merger is expected to create a leading specialty vehicle company with strong positions in the North American and European markets.
The Shyft Group, recognized for its manufacturing, assembly, and equipment upgrade capabilities for commercial, retail, and service specialty vehicle markets, will combine with Aebi Schmidt's complementary portfolio, which includes commercial truck equipment upgrades and various infrastructure solutions. This move is anticipated to enhance competitive growth and deliver significant value to shareholders. The combined company is projected to achieve approximately $1.95 billion in pro forma revenue and over $200 million in adjusted EBITDA by 2024, including synergies.
Shyft shares increased by 20% following the news. As a result of the unanimous approval of the transaction by the boards of both companies, Shyft shareholders will own 48% of the combined entity, while Aebi Schmidt shareholders will own 52%. The agreement is structured to be tax-free for Shyft shareholders and is expected to close by mid-2025, subject to customary conditions and approvals.
Shyft's President and CEO John Dunn emphasized the strategic benefits of the merger, highlighting the potential to create a more resilient company with meaningful growth opportunities and shareholder value creation potential. Aebi Schmidt's CEO Barend Fruithof noted that a differentiated leader in the specialty vehicle industry has been formed by leveraging the combined capabilities and expertise of both companies.
The combined company is expected to capitalize on significant growth opportunities, with approximately 75% of its revenue projected to come from the North American market. Additionally, the merger is projected to generate between $25 million to $30 million in anticipated synergies by the second year following the closing and contribute to double-digit EBITDA margins.
After the transaction is completed, the combined company will be traded on NASDAQ, based in Switzerland, with a significant operational footprint in the U.S. Barend Fruithof is appointed as President and CEO Candidate, while Shyft's current Chairman James Sharman is appointed as Chairman Candidate.