Linamar Corporation has entered into a definitive agreement to acquire 100% of the outstanding equity interests of MacDon and its Group of Companies for an aggregate purchase price of C$1,200 Million, less the assumption of small transaction related expenses, and subject to certain customary adjustments. Headquartered in Winnipeg, Manitoba, Canada, MacDon is a global innovative market leader in the design and manufacturing of specialized agriculture harvesting equipment such as drapers and self-propelled windrowers.
MacDon is an industry-leading manufacturer with a strong customer following and advanced agriculture equipment technologies. It has developed an indstury-leading reputation for quality, reliability and passion for harvesting technology over its 67 year history as a family owned company. MacDon's mission is to manufacture reliable machines that make harvesting easier and more productive for its customers in over 40 countries worldwide.
MacDon's products excel in the toughest real-world conditions, and its pioneering, industry-leading innovations like the FlexDraper have propelled the company's strong reputation for providing customers with quality, innovative equipment. Further, MacDon has developed strong relationships with a global dealer network of approximately 1,400 leading dealers and distributors, a major competitive advantage in the industry. Linamar sees a compelling cultural fit with MacDon given its strong family legacy and looks forward to building on that foundation, which has been a key driver of MacDon's success. This platform acquisition positions Linamar as a leading global agricultural equipment manufacturer.
MacDon will be combined with Linamar's existing agriculture harvesting business in Hungary to position both businesses for significant growth. Linamar's existing harvesting business is highly complementary to MacDon product plan allowing Linamar to offer a full lineup of grain and hay harvesting equipment. Linamar plans to expand its agricultural platform by increasing penetration in both new and underserviced markets globally. Linamar expects to realize modest synergies from the Transaction and create opportunities to utilize existing distribution channels for agricultural products. The Transaction is expected to be immediately accretive to earnings per share and free cash flow per share even before accounting for these synergies. As it expands, MacDon will benefit from Linamar's established manufacturing footprint in Asia and Europe along with employing best practices from both Linamar and MacDon.
Linamar has a long track record of executing strategic, accretive acquisitions followed by seamless integration. Its previous acquisitions of Skyjack, Montupet and Seissenschmidt are compelling case studies of Linamar building its global manufacturing platform with broader product lines, additional capabilities in new markets and incremental geographic presence, while continuing to deliver outstanding financial performance and returns to its shareholders.
"The acquisition of MacDon provides a truly once-in-a-lifetime opportunity to move our agriculture business into a market leading position while providing meaningful diversification to the end markets we serve. We believe the long-term growth fundamentals for the agriculture industry are very strong given the growing and developing global population, noting the market is in the early stages of cyclical recovery." said Linda Hasenfratz, Linamar's CEO, "MacDon is a strong, well-managed company and an innovative market leader in both customer penetration and technology evolution; it will be the centerpiece of our agriculture business, which includes our existing European corn header business, highly complementary to MacDon products. We get diversification, innovation, growth and a solid deal, we couldn't be happier."
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