Hydratec industries and Ten Cate Investeringsmaatschappij agree on recommended public cash or share offer (keuzebod) at 142.50 euro per share

18 Jan Hydratec industries and Ten Cate Investeringsmaatschappij agree on recommended public cash or share offer (keuzebod) at 142.50 euro per share

On 18 January 2024, Hydratec Industries, the sustainable producer of systems for a growing and ageing world population and producer of hightech components, and the Offeror, a wholly owned subsidiary of TCIM, the investment vehicle of the Ten Cate family, have reached conditional agreement on an intended recommended public offer for all issued and outstanding shares in the capital of the Company against: (a) EUR 142.50 (cum dividend) in cash per share, or, at the election of each Shareholder, (b) one non-listed ordinary share in de capital of the Offeror.

The Cash Consideration represents a premium of 52.4% to Hydratec Industries’ closing price per Share on 18 January 2024 of EUR 93.50. This delivers immediate, certain and attractive value to the Shareholders. The Offer values 100% of the Shares at approximately EUR 185 million.

The Offeror, primarily through TCIM, currently controls approximately 69% of the Shares of Hydratec Industries. TCIM has been the controlling Shareholder of Hydratec Industries since its foundation. The Offeror and Hydratec Industries believe that the current public listing offers limited added value to Hydratec Industries and its stakeholders, and does not outweigh the costs and other disadvantages associated with its listing. The Offeror and Hydratec Industries believe that a non-listed environment with the backing of committed, long term Shareholders, will enhance the sustainable success of the Company’s business, and create the ability to implement and focus on achieving the long-term strategic goals of the Company, as opposed to short-term performance driven by periodic reporting and market expectations.

The Offeror fully supports Hydratec Industries’ existing strategy and vision. It has no intention to change its management and is committed to the long-term interests and future growth of Hydratec Industries and its business, taking into account the interests of its stakeholders, including its employees, customers and suppliers. Hydratec Industries (or its successor) will continue as a separate legal entity and retain its corporate identity, brand names and culture.

Support and unanimous recommendation from the Boards

After due consideration and evaluation, the Boards believe that the Offeror has made a compelling Offer representing an attractive cash premium to the Shareholders or an attractive opportunity to reinvest in the Offeror after the envisaged delisting of Hydratec Industries, as well as favourable non-financial terms and deal certainty. The Boards consider the Offer to be in the best interest of the Company and all of the Company’s stakeholders.

Operating in a non-listed setting supports Hydratec Industries in the next phase of its development, promoting the long-term sustainable success of the Company and enables the management team to accelerate the execution of its business strategy. The headquarters of Hydratec Industries will remain in Amersfoort, the Netherlands, and the Company’s corporate identity, core values and culture will be maintained.

The Offeror and Hydratec Industries have agreed that upon completion of the Offer, holders of non-listed Offeror Shares may at any time offer their Offeror Shares to TCIM for a cash consideration determined on the basis of the EV (Enterprise Value) /EBITDA multiple that is implied by the Cash Consideration under the Offer, and on terms that will be specified in more detail in the Offer Memorandum.

Taking all these considerations into account, the Boards unanimously support the Offer and recommend that the Shareholders tender their Shares under the Offer, if and when made, and vote in favour of the resolutions relating to the Offer at an extraordinary general meeting of shareholders, each in accordance with the terms set out in the Merger Protocol. The Board Recommendation will also be included in the position statement of Hydratec Industries which will be published simultaneously with the publication of the Offer Memorandum.