- Mercer International Inc. (NASDAQ:MERC) has agreed to acquire all of the outstanding shares of the parent company of Holzindustrie Torgau (HIT) for consideration of €270 million ($275.4 million), inclusive of forecasted net working capital of ~€43 million.
- HIT is a producer of EPAL wood pallets used for shipping. HIT owns, among other things, 100% of a timber processing and value-add pallet production facility in Torgau, Germany, and a wood processing facility in Dahlen, Germany, that produces garden products.
- For FY21, HIT had net revenues of €227 million, net income of €31 million, and Adjusted EBITDA of €68 million.
- For 1Q22, HIT had revenues of €72 million, net income of €12 million, and Adjusted EBITDA of €22 million.
- Mercer expects HIT integration to generate operating synergies of ~$16 million per year and the deal to be immediately accretive.
- The transaction is expected to close in the third or early fourth quarter of 2022.
- Mercer intends to pay the purchase price using its existing cash on hand and/or revolving credit facilities. The forest products company held cash and equivalents of ~$410.7 million as of March-end.
- Price Action: MERC shares are trading lower by 2.40% at $15.07 on the last check Friday.
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Based in San Jose, California, Super Micro designs and manufactures high-performance server and storage solutions for demanding computational tasks.
