USD 3.7 BN DEAL - Joy Global Announces Agreement to Be Acquired by Komatsu in $3.7 Billion All-Cash Transaction
Joy Global Announces Agreement to Be Acquired by Komatsu in $3.7 Billion All-Cash Transaction
Delivers substantial all-cash premium to Joy Global stockholders
Komatsu committed to long-term growth of Joy Global, which will operate as a separate subsidiary of Komatsu
Business Wire
MILWAUKEE -- July 21, 2016
Add subhead to release:
Delivers substantial all-cash premium to Joy Global stockholders
Komatsu committed to long-term growth of Joy Global, which will operate as a separate subsidiary of Komatsu
The corrected release reads:
JOY GLOBAL ANNOUNCES AGREEMENT TO BE ACQUIRED BY KOMATSU IN $3.7 BILLION ALL-CASH TRANSACTION
Delivers substantial all-cash premium to Joy Global stockholders
Komatsu committed to long-term growth of Joy Global, which will operate as a separate subsidiary of Komatsu
Joy Global Inc. (NYSE: JOY) (“Joy Global”), a worldwide leader in high-productivity mining solutions, today announced that its Board of Directors has unanimously approved a definitive merger agreement under which Komatsu America Corp., a subsidiary of Komatsu Ltd. (TYO: 6301) (“Komatsu”), will acquire Joy Global in a transaction valued at approximately $3.7 billion, including Joy Global’s outstanding indebtedness. Under the terms of the agreement, Joy Global stockholders will receive $28.30 per share in cash for each outstanding share of common stock held, representing a 48% premium to the volume weighted average closing price of Joy Global’s common stock for the 90 trading days and a 41% premium to the volume weighted average closing price of Joy Global’s common stock for the 60 trading days prior to July 21, 2016.
Komatsu intends to operate Joy Global as a separate subsidiary of Komatsu and retain the strength of the Joy Global brand names. The companies will align the organization and operation for optimal customer support from Joy Global’s headquarters in Milwaukee, Wisconsin. Komatsu and Joy Global’s products and services are highly complementary and the combined organization will continue to focus on safety, productivity and life cycle cost improvement for customers. Komatsu plans to leverage both companies’ leading technologies to pursue product and service innovation to enhance mine safety and productivity. In addition, the companies employ complementary strategies and are committed to an integrated direct sales and service model.
“This is a compelling transaction that delivers substantial and certain value to our stockholders as well as expanded options for our customers and employees going forward,” said Ted Doheny, President and Chief Executive Officer of Joy Global. “We believe this is the right partnership to meet the evolving needs of our customers while furthering our ability to lead the mining industry with game-changing technologies and best-in-class products. Joy Global’s Board of Directors, in making its determination, considered the challenging market conditions the company believes are likely to persist. The mining industry continues to face cyclical headwinds from oversupplied commodities and reduced end user demand resulting in cash flow restrictions for most producers, creating an increasingly challenging environment. We are also seeing structural changes in the U.S. and China coal industry.
“Our companies share similar cultures and values,” Doheny continued, “and we expect many Joy Global employees to benefit from exciting career opportunities as part of an even larger, more diversified company. On behalf of the Joy Global Board and management team, we thank our dedicated employees for their continued hard work and commitment to solving mining’s toughest challenges.”
Closing Conditions
The transaction is subject to customary closing conditions, including approval by Joy Global stockholders, the expiration or termination of the applicable waiting period under the U.S. Hart-Scott-Rodino Antitrust Improvements Act and regulatory approvals in certain other jurisdictions. The transaction is expected to close by mid-2017.
The transaction is not subject to any financing conditions. Komatsu had total assets of JPY2,614 billion ($25 billion) and total equity of JPY1,517 billion ($14 billion) as of March 31, 2016 with a credit rating of A from S&P and A2 from Moody’s.
Advisors
Goldman, Sachs & Co. is serving as financial advisor and Wachtell, Lipton, Rosen & Katz is serving as legal counsel to Joy Global. Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. is serving as financial advisor to Komatsu, and Arnold & Porter LLP and Nagashima Ohno & Tsunematsu are serving as legal counsel.
About Joy Global Inc.
Joy Global is a leading provider of advanced equipment, systems and direct services for the global mining industry. The company’s P&H, Joy and Montabert branded equipment is a critical component of operations in a variety of commodity markets including energy, hard rock and industrial minerals. Based in Milwaukee, Wisconsin, USA, Joy Global employs 12,000 people in 20 countries. For more information visit www.joyglobal.com.
About Komatsu Ltd.
Komatsu Ltd., established in 1921, is a diversified provider of industrial-use products and services. While remaining an international leader in the field of construction and mining equipment, the company engages in other business, such as industrial machinery and vehicles, logistics, electronics and other solutions-based operations. Based in Tokyo, Japan, Komatsu employs more than 47,000 globally on a consolidated basis. For more information visitwww.komatsu.com.