Manufacturer, even after pandemic dip, sold in $4.3 billion deal

NEW PORT RICHEY — New Port Richey-based Welbilt Inc., a maker of foodservice equipment, has been sold.

Illinois-based Middleby Corp., which also makes foodservice equipment, acquired the company in an all-stock deal. According to a statement released by both companies, the deal could be valued at $4.3 billion. Shares of Welbilt (NYSE: WBT) surged on news of the deal, closing Wednesday at $22.58 a share, up 44.46% from $15.63 a share Tuesday. The company is one of the region's largest employers and manufacturers. 

The deal has received the approval of both boards of directors and is expected to close later this year. Investor Carl Icahn, Welbilt’s largest shareholder, supports the sale.

Middleby’s CEO Timothy FitzGerald and CFO Bryan Mittelman will stay on with the combined companies. Two of Welbilt’s directors – Cynthia Egnotovich and William Johnson – will join an expanded board of directors, the release states. 

It is not known, so far, if there will be job cuts at Welbilt or if any facilities, including in New Port Richey, will be affected. Richard Sheffer, Welbilt’s vice president of investor relations, risk management and treasurer, wrote in an email to the Business Observer Wednesday that “when two organizations come together there may be duplication of work and, as a result, this may impact positions.”

“No decisions have been made regarding any positions or people at this time,” he says.

“It is important to reiterate that from a market perspective, markets are recovering and, as they do, this often can result in the creation of more jobs rather than a reduction in jobs. There are a lot of steps to go through in a deal such as this. Taking care of our people will be front of mind.”

According to the statement, the combined company will have about $3.7 billion in 2020 sales, 73% of which will come from the commercial food divisions.

“The combination of our two great companies creates a leading player with a comprehensive product line, global footprint and advanced technologies and solutions that are well positioned to serve our rapidly changing customer needs and capitalize on emerging industry trends,” FitzGerald says in the statement.

“The acquisition of Welbilt is a transformational opportunity for Middleby and a compelling combination that will benefit all of our stakeholders.” 

Welbilt traces its roots back to 1929 when brothers Henry and Alexander Hirsch founded the Welbilt Stove Co. The company was called Welbilt until 2000 when it changed its name to Enodis.

Wisconsin-based The Manitowoc Company bought Enodis in 2008 and the current company was spun off in 2016 as the rechristened Manitowoc Foodservice Inc.

It changed its name to Welbilt the following year to reflect its history.

The company, based in Pasco County since 2008, currently operates 19 facilities worldwide and sells its products through 5,000 distributors. It has about 4,400 employees.

According to the company’s earnings report released in February, Welbilt’s annual net sales fell 27.6% in 2020 from the previous year to $1.15 billion.

Earnings fell from $63.1 million to $173.9 million. 

The sale announcement comes a little more than a year after the Welbilt announced plant closings and job cuts to adjust for the impact of the pandemic on the restaurant industry.

The company said at the time that it was shuttering five of its 10 North American plants for one to two weeks, as well as three of its six facilities in Europe, the Middle East and Africa.

Welbilt also laid off 200 employees at the time, a reduction that was expected to cut costs by approximately $3.5-$4.5 million. 

In addition to those cuts, members of Welbilt’s board of directors reduced their cash-based fees by 50% and the company’s executive leadership team had its base pay cut by 50%, while salaried employees saw pay reductions of between 10% and 25%. Some salaried and hourly employees were furloughed, the company said at the time.