SKF To Buy Kaydon For About $1.25 Bln - Quick Facts

(RTTNews) - Goteborg, Sweden-based SKF (SKFRY.PK, SKFB.L) has agreed to acquire US-based Kaydon Corp. (KDN) in an all-cash transaction worth around $1.25 billion, including $95 million of net debt. The transaction would be paid via. existing cash and credit lines and would be accretive to SKF earnings in year one.

SKF said it would launch an all-cash tender offer for all outstanding shares of Kaydon. Pursuant to the agreement, SKF would begin a tender offer to buy Kaydon's outstanding shares for $35.50 per share cash. The tender offer would commence on September 16, 2013, subject to customary terms and conditions, regulatory clearances, including the tender of at least a majority of Kaydon's outstanding shares. Following the tender offer completion, SKF would purchase all remaining shares via. a short form merger.

The transaction represents a 22% premium to Kaydon's closing stock price on September 4, 2013, a 21% premium to the 30-day volume weighted average price and a multiple of 12.7 times Kaydon's LTM Adjusted EBITDA. The transaction may close sometime in the fourth quarter of 2013.

Kaydon's addition to the SKF Group would have given a proforma sales increase for the year 2012 from 64.6 billion Swedish Kronor to around 67.7 billion Kronor and with an adjusted operating profit from 7.3 billion Kronor to about 7.8 billion Kronor. Correspondingly, the proforma statement for the first half of 2013 would improve the SKF turnover from 31.5 billion Kronor to around 33.0 billion Kronor, and with an adjusted operating profit from 3.3 billion Kronor to roughly 3.5 billion Kronor, according to SKF.

Kaydon, a diversified industrial manufacturer, has a global footprint with 62% of its sales generated in North America, 24% in Europe, 12% in Asia Pacific and 2% in the rest of the world. The company recorded $475 million of sales in 2012, with an adjusted operating profit of around 16% and has over 2,100 employees.