Middleby to spin off food processing business into separate public entity

Investing.com -- The Middleby (NASDAQ:MIDD) Corporation (NASDAQ: MIDD), a global manufacturer of equipment for commercial foodservice, residential kitchens and food processing industries, announced today its decision to separate its food processing business into a standalone public company. This separation, unanimously approved by the Board of Directors, will result in two independent entities: The Middleby Corporation (Middleby RemainCo) and Middleby Food Processing. The company plans to carry out this separation through a tax-free spin-off, expected to be completed by early 2026.

Middleby CEO, Tim FitzGerald, stated that the decision came after a thorough review of their business portfolio over several quarters. He emphasized that their team has successfully built a top-tier food processing business, which is now ready to take the next strategic step. FitzGerald believes that as an independent company, Middleby Food Processing will be a more focused and scaled entity, with best-in-class solutions serving attractive markets supported by favorable industry trends.

FitzGerald also highlighted the potential for growth both organically and through strategic mergers and acquisitions, with a robust pipeline of existing opportunities. He expressed confidence that this separation will provide benefits for their customers and team members while creating significant long-term value for their shareholders.

The CEO also expressed expectations for Middleby RemainCo to extend its market leadership in commercial foodservice and residential kitchens. He emphasized the company’s plan to capitalize on its portfolio of product innovations and premium brands to expand its top-tier margins and continue to grow its cash generation.

The separation of the Food Processing business is anticipated to bring value to all Middleby shareholders and stakeholders. The benefits include enabling a heightened strategic focus at each standalone entity, creating market-leading businesses recognized as technology-driven product innovators in their respective industries, and allowing Food Processing to be valued in-line with key food processing peers.

The separation will also allow each standalone entity to implement an optimized capital structure and capital allocation policy, best supporting growth opportunities for their respective businesses. It will provide financial flexibility to pursue optimal growth strategies throughout investment cycles and enhance the financial and strategic impact of mergers and acquisitions for each business. The separation will result in focused boards of directors and management teams with deep domain expertise.

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