CNH Industrial N.V. (NYSE:CNHI) completed the acquisition of Raven Industries, Inc. (NASDAQ:RAVN).
CNH Industrial N.V. (NYSE:CNHI) entered into an agreement to acquire Raven Industries, Inc. (NASDAQ: RAVN) for $2.1 billion on June 20, 2021. As reported, CNH Industrial will acquire Raven Industries for $58 per share representing a 33.6% premium to the Raven Industries 4-week volume-weighted average stock price, and $2.1 billion enterprise value. Cash consideration for the transaction is not included in the free cash flow definition, and consequently it will not affect its free cash flow guidance for the FY 2021E. The transaction will be funded with available cash on hand of CNH Industrial not affecting third party debt of industrial activities. Raven Industries capabilities, innovation culture, entrepreneurial spirit and engineering talent are impressive and will continue to thrive as part of the CNH Industrial family. Sioux Falls is and will continue to be a true center of excellence. Raven shall pay CNH Industrial termination fee of $64 million. CNH Industrial will be required to pay Raven a termination fee of $200 million under certain circumstances if the agreement is terminated in connection with a failure to obtain required regulatory approvals.
On June 20, 2021, the Personnel & Compensation Committee (the “Committee”) of the Board of Raven approved (i) the entry by Raven into Amended and Restated Change in Control Agreements (collectively, the “Amended Change in Control Agreements”) with certain executives of Raven, including Raven’s named executive officers, (ii) the entry by Raven into an amendment and restatement of the existing employment agreements with Raven's Chief Executive Officer, Daniel A. Rykhus, and Division Vice President and General Manager for Raven Applied Technology, Steven E. Brazones. Under the Employment Agreement Amendments, the severance benefits provided to Daniel Rykhus and Steven Brazones upon or following a Change in Control were removed in recognition of Raven's entry into Amended Change in Control Agreements with Mr. Rykhus and Mr. Brazones.
The transaction is subject to the satisfaction of customary closing conditions, including approval of Raven shareholders, any applicable waiting period under the HSR Act relating to the Merger shall have expired or been terminated, CFIUS approval and receipt of regulatory approvals. Transaction has been approved by the Boards of Directors of the respective parties. Board recommends that the Raven shareholders vote “FOR” the proposal to approve the Merger Agreement. Raven Industries Shareholders Approved the Transaction With CNH Industrial on September 15, 2021. The transaction is expected to close prior to the end of the current calendar year. As of August 6, 2021, the transaction is expected to close in fourth quarter of 2021. The transaction is expected to generate approximately $400 million of run-rate revenue synergies by calendar year 2025, resulting in $150 million of incremental EBITDA from synergies.
Enrico Chiapparoli, Larry Hamdan, Rory Elliott and Amber Graham-Watson of Barclays and Goldman Sachs acted as financial advisors and Scott D. Miller, Eric J. Kadel, Jr. and Steven L. Holley of Sullivan & Cromwell LLP acted as legal advisor to CNH Industrial. Rodney Miller, Michael Murphy and Chris Pine of J.P. Morgan Securities LLC acted as financial advisors and Darren Schweiger, George R. Bason, Jeffrey P. Crandall, William A. Curran, Jesse Solomon, Frank J. Azzopardi and John B. Reynolds III of Davis Polk & Wardwell LLP acted as legal advisors to Raven. Tim Ingrassia represented Goldman Sachs. Richard M. Assmus and B. Clayton McCraw of Mayer Brown International LLP acted as intellectual property counsel to CNH Industrial. MacKenzie Partners, Inc. acted as proxy solicitor to Raven. Raven has agreed to pay J.P. Morgan a transaction fee that is estimated, based on information available as of the date of announcement, to be approximately $28 million, $3 million of which became payable following delivery of J.P. Morgan’s opinion, and the remainder of which is contingent and payable upon consummation of the merger. Simpson Thacher & Bartlett LLP acted as legal advisor to J.P. Morgan Securities LLC. MacKenzie Partners will be paid a solicitation fee of approximately $15,000 and will be reimbursed for its reasonable out-of-pocket expenses for these and other advisory services in connection with the special meeting.
CNH Industrial N.V. (NYSE:CNHI) completed the acquisition of Raven Industries, Inc. (NASDAQ:RAVN) on November 30, 2021.