Alfa Laval AB offered to buy Munters AB for 5.03 billion kronor ($698 million) as the Swedish manufacturer expands from fluid-control equipment into air treatment.
Investors will receive 68 kronor a share in cash for Munters under the terms of the offer, the Lund-based company said in a statement today. That’s about 30 percent higher than Munters’ closing share price of 52.5 kronor on Sept. 3. Shares of the dehumidifier maker climbed to the bid price.
“Munters has strong application knowledge in air treatment, while Alfa is more into fluids,” Christer Fredriksson, an analyst at ABG Sundal Collier ASA, said in a note. The company’s technology “adds an interesting third leg next to Alfa’s heat exchangers and separators,” he said.
Alfa Laval plans to drive sales of climate-control equipment in the faster growing markets of South America, eastern Europe and Asia. Chief Executive Officer Lars Renstroem said today he’s seeking to boost annual sales by 3 to 4 percent through acquisitions. Munters will add 3.8 billion kronor in sales to Alfa Laval’s turnover of 26 billion kronor.
Alfa Laval rose 1.3 kronor, or 1.1 percent, to 115.1 kronor in Stockholm trading as of 9:31 a.m. Swedish time. Shares of the company have advanced 16 percent so far this year, making them the seventh-best performing stock on the Stockholm OMX 30 Index. Munters traded at 68.25 kronor.
Both companies operate in the environmental and energy recovery segments. That means the acquisition should result in sales synergies as Munters can use Alfa Laval’s strong sales network and market positions, ABG Sundal’s Fredriksson said.
The “slightly rich valuation puts burden of proof on Alfa’s management to be able to meaningfully improve Munters’ sales and profitability,” said Fredriksson, who rates Alfa a “buy.”
The two largest shareholders of Munters, Industrivaerden AB and Investment AB Latour, which together control 29.6 percent of the company, have accepted the offer. Lannebo Fonder, which holds 4.8 percent of Munters’ shares, has expressed their support for the offer, Alfa Laval said.
Munters has hired Lazard Ltd. as a financial adviser, and legal firm Mannheimer Swartling, to help evaluate the offer.
The bid is conditional upon 90 percent of shareholders accepting it.