Stork NV (Netherlands) - Dec 2007

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01 December 2007

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Investors

Candover has announced that it is intending to make a cash offer of €48.50 per ordinary share in Stork NV, which values the company at approximately €1.6bn. The offer also involves the sale of Stork’s food systems division to Marel Food Systems for €415m on a cash and debt free basis. The offer is unanimously supported and recommended by the management board and the supervisory board, including the court appointed extraordinary supervisory board members. Candover had withdrawn its initial offer in September after the support of LME Holdings, which raised its stake in the company to more than 43%, could not be secured. Owned by Landsbanki Islands and Eyrir Invest, LME also includes Marel, which had been trying to buy Stork’s food service business for a long time. LME has now expressed its support, along with Centaurus Capital and Paulson, which collectively own 33% of the company. Candover officials have reportedly said that the cost of financing the deal turned out to be 20% higher than projections prior to the credit squeeze. The leverage also fell from 6.5x operating profits to 5x, but Candover is hoping to improve the financing terms in time.

Company

The first Stork factory, one that manufactured machines for textile manufacturers, was established in 1868. Apart from food systems, Stork is also active in technical services and aerospace, supplying components to Boeing and Airbus. The company recently sold its Stork Prints division to Bencis Capital Partners in an effort to achieve greater focus on its core activities. Although the food business was more profitable in 2006 than the aerospace division, the investors plan to grow the latter through acquisitions and capital expenditure. One acquisition is reportedly already in the pipeline. The company’s turnover was €2bn in 2006, up by 5% on 2005, with net profits amounting to €150m.

People

Sjoerd Vollebregt is the CEO of Stork. Marek Gumienny is the managing director of Candover.

Advisers

Equity - Barons Financial Services Ltd, (Financial Due Diligence)Equity - Clifford Chance LLP, (Legal)Equity - Goldman Sachs, (Corporate Finance)Vendor - ABN AMRO, (Financial Due Diligence)Vendor - De Brauw Blackstone Westbroek - United Kingdom, (Legal)Vendor - Kempen & Co, (Financial Due Diligence)Vendor - NautaDutilh, (Legal)Vendor - Stibbe, (Legal)