Shyft shares surge on merger agreement

Shares of The Shyft Group (NASDAQ: SHYF) rose 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 anticipated to create a leading specialty vehicles company with strong positions in North American and European markets.

The Shyft Group, known for its manufacturing, assembly, and upfit for commercial, retail, and service specialty vehicle markets, will combine with Aebi Schmidt's complementary portfolio, including commercial truck upfitting and a range of infrastructure solutions. The move is expected to drive competitive growth and deliver significant shareholder value. The combined company is projected to generate pro forma revenue of approximately $1.95 billion and adjusted EBITDA of over $200 million, including synergies, by 2024.

Shyft stock rose 20% following the news. The transaction, which was unanimously approved by the Board of Directors of both companies, will result in Shyft shareholders owning 48% and Aebi Schmidt shareholders 52% of the combined entity. The deal is structured to be tax-free to Shyft shareholders and is expected to close by mid-2025, subject to customary conditions and approvals.

John Dunn, President and CEO of Shyft, commented on the strategic benefits of the merger, emphasizing the creation of a more resilient company with meaningful growth opportunities and the potential to unlock value for shareholders. Barend Fruithof, CEO of Aebi Schmidt, highlighted the combined capabilities and expertise of both companies, establishing a differentiated leader in the specialty vehicles industry.

The combined company is poised to capitalize on significant growth opportunities, with approximately 75% of its revenue expected to come from the North American market. The merger is also projected to unlock $25 to $30 million in expected synergies by the second year following the close, contributing to double-digit EBITDA margins.

Upon completion of the transaction, the combined company will trade on NASDAQ, with a Swiss domicile and a significant operational footprint in the US. Barend Fruithof is named President and CEO Elect, and James Sharman, current Chairman of Shyft's Board, is appointed Chairman Elect.

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Source: Investing.com