Boels Topholding B.V. and Cramo Plc yesterday entered into an agreement for Boels to make a voluntary recommended public cash tender offer to purchase all of the issued and outstanding shares in Cramo that are not owned by Cramo or any of its subsidiaries. In the tender offer, Cramo’s shareholders will be offered a cash consideration of € 13.25 for each share, valuing Cramo’s equity at approximately €592 million. Cramo’s board of directors has unanimously decided to recommend that the shareholders of Cramo accept the offer.
The offer price represents a premium of approximately:
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- 31.2 percent compared to the closing price of the Cramo share on Nasdaq Helsinki Ltd. on November 4, 2019, the last trading day prior to the announcement by Cramo that it was evaluating a potential tender offer on November 5, 2019;
- 52.6 percent compared to the volume-weighted average trading price of the Cramo share on Nasdaq Helsinki during the 3-month period prior to and up to the original disclosure date (Nov. 50; and
- 50.8 percent compared to the volume-weighted average trading price of the Cramo share on Nasdaq Helsinki during the period from July 1, 2019, the day of the demerger of Adapteo Plc, to the original disclosure date.
Major shareholders of Cramo, EQT Public Value Investments S.à r.l., Rakennusmestarien Säätiö sr and Varma Mutual Pension Insurance Co. as well as the CEO of Cramo Leif Gustafsson have irrevocably undertaken to accept the tender offer subject to certain customary conditions. The irrevocable undertakings represent jointly approximately 18.9 percent of the outstanding shares and votes in Cramo.
The completion of the Tender Offer is subject to certain customary conditions to be fulfilled on or by the date of Boel’s announcement of the final result of the tender offer, including, among others, approvals by the relevant competition authorities, and the Boels obtaining more than 90 percent of the outstanding shares and votes in Cramo on a fully diluted basis;
Boels has committed financing in place, providing high deal certainty; and will, on or about November 25, 2019, publish a tender offer document with detailed information about the tender offer;
- The offer period under the Tender Offer is expected to commence on or about November 25, 2019 and to expire in the first half of January 2020, and thus, to run for approximately seven (7) weeks, subject to any extension of the offer period by the Offeror in accordance with the terms and conditions of the Tender Offer.
Boels, headquartered in Sittard, The Netherlands, is one of the most renowned equipment rental companies in Europe and the No. 1 player in the Benelux, focusing on equipment rental. Boels is a generalist but has throughout the years established specialized divisions. Since its founding in 1977 Boels has grown into a rental company with more than 4,200 employees and more than 450 depots in 11 countries. The strong expansion of activities is based on autonomous growth as well as a number of strategic acquisitions and has resulted in a doubling of volume every five years. This makes Boels one of the fastest growing rental companies, and one of the largest rental companies in Europe.
Cramo is one of the leading European equipment rental services companies with revenue of € 632 million in 2018, serving approximately 150,000 customers through around 300 depots in 11 countries with a full range of machinery, equipment and related services. Cramo enjoys a solid market position in all its key markets and has a strong focus on the most sophisticated customers primarily within the renovation and new-build construction, industrial and public sector end-markets.
Pan-European leader in equipment rental
The combination of Boels and Cramo would create a leading player in the European equipment rental market with combined annual revenues of approximately € 1,250 million and one of the largest depot networks in Europe (more than 750 branches). The enlarged group would create the opportunity to serve customers better, optimize fleets and retain and attract more talented staff.
The enlarged group would be well diversified in terms of customers, business and geographic mix. The combination of Cramo’s Scandinavian and Central European business with Boels’ existing network in the Benelux, UK and DACH region (Germany, Austria and Switzerland) would create a true pan-European equipment rental player with increased scale and resilience. The combined business would be well positioned to grow its markets by leveraging this scale and footprint.
The combination of Boels and Cramo would have the opportunity to integrate operations in Central Europe and capitalize on mutual best practices in terms of fleet range, logistics and customer service levels. Boels feels that sharing these best practices has the potential to further increase the commercial success of the combined operations in Central Europe.
The combined group would be in a position to further strengthen its prospects within the highly fragmented European market. Cramo would become the Scandinavian platform for the enlarged group, and Boels expects to continue its growth and strengthen its positions and to further develop its footprint in the region, while capitalizing on the benefits and extended financial and operational leverage of an enlarged group.
Also, Boels values the current management and organization of Cramo highly and is impressed by the successful development of the company. The completion of the tender offer is not expected to have any immediate material effects on Cramo’s operation, assets, the position of Cramo’s management, employees or its business locations. As is customary, Boels intends to change the composition of the board of directors of Cramo after the completion of the offer to reflect the new ownership structure of Cramo.
“Our vision is to build a European leader in the equipment rental market,” said Pierre Boels, CEO of Boels. “We have a strong conviction in the strategic combination of Boels and Cramo. The combined company will be a leading player in Europe with a business in 17 countries, and a top-3 position in 12 of those. It will be well diversified in terms of customers, business and geographies. We combine rental equipment, data, safety and expertise to improve customer efficiency. Our companies know each other well and have a good fit both strategically and culturally. We share the same strategy, focusing on building scale locally to secure leading positions in the countries where we operate. And we both hold our employees in high regard. Boels appreciates the unanimous recommendation by the board of Cramo. We look forward to building a shared future together.”
“During the last years, we have worked hard to create value for our shareholders,” said Cramo chairman Veli-Matti Reinikkala. “The demerger and spin-off of Adapteo was an important step to create two independently focused and attractive companies, resulting also in released shareholder value. For stand-alone Cramo, this has created the opportunity to take part in the ongoing and important consolidation in Europe. Boels is in that regard an excellent owner of and partner to Cramo. We also believe that for our existing shareholders, the offer price represents an attractive cash premium and is a reflection of the trust Boels has in Cramo as a company and the strategy moving forward as one company. Taking into consideration all aspects for all stakeholders, the board of directors of Cramo has unanimously decided to recommend that shareholders of Cramo accept the Tender Offer.”
Leif Gustafsson, CEO of Cramo added:
“Over the past year all our employees have worked hard to position Cramo in the best possible way for the future. The demerger of our company was an important milestone in creating a pure equipment rental focused Cramo. We have now reshaped the company, launched a new strategy, taken the right steps to improve performance and set the foundation to differentiate ourselves from the competition. This work has paid off. Now the combination with Boels, which we respect a lot, gives us the opportunity to take the next step in our commitment to serving the interests of our clients, employees and other stakeholders. Together with Boels we will make a leap forward to become a European leader in our industry.”
Boels has appointed Rothschild & Co and Duynstee Advisory as lead financial advisors. Nordea Bank Abp is acting as Finnish financial advisor to Boels and arranger in relation to the Tender Offer outside the United States. De Brauw Blackstone Westbroek N.V. and Roschier, Attorneys Ltd. are acting as legal advisors to Boels in connection with the Tender Offer. Hill+Knowlton Strategies is acting as communications advisor.
BNP Paribas acts as the financial advisor and Krogerus Attorneys Ltd as the legal advisor to Cramo in connection with the Tender Offer.
