The Shyft Group to Merge with Aebi Schmidt Group to Create A Specialty Vehicles Leader

Highly Complementary Portfolios Create Opportunities to Better Serve Customers and Drive Competitive Growth

The Shyft Group (NASDAQ: SHYF) (“Shyft”), and Aebi Schmidt Group (“Aebi Schmidt”), announced a definitive agreement to combine in an all-stock merger to create a leading specialty vehicles company positioned for outsized growth. Under the terms of the agreement, each outstanding share of Shyft common stock will be exchanged for 1.04 shares of the combined company’s common stock. At closing, Shyft shareholders will own 48 percent of the combined company, with Aebi Schmidt shareholders owning 52 percent. The transaction, which is structured to be tax-free to Shyft shareholders, has been unanimously approved by the members of the Board of Directors present of each company.

The merger will combine Aebi Schmidt’s specialty vehicle products and services, including commercial truck upfitting, snow and ice, street sweeping and pavement marking, airport snow and ice, and agricultural solutions, with Shyft’s manufacturing, assembly, and upfit for the commercial, retail, and service specialty vehicle markets to create a full-suite of offerings for both companies’ customers. The combined company will benefit from a scaled platform in the attractive North American market, complemented by a strong European presence, and an enhanced financial profile to support profitable growth and deliver additional value to shareholders.

“Combining with Aebi Schmidt is a powerful next step in Shyft’s strategy as we leverage the strengths of both companies’ industry leading brands, innovative products, extensive customer relationships, and manufacturing excellence,” said John Dunn, President and CEO of Shyft. “This transaction creates a more resilient company with meaningful growth opportunities in the commercial truck space and infrastructure related solutions. I am confident Shyft’s talented team members will thrive within this newly combined platform and that this transaction is the best path forward to unlocking value for our shareholders.”

Barend Fruithof, CEO of Aebi Schmidt said, “By bringing together the capabilities and expertise of both companies, we are establishing a truly differentiated leader in the specialty vehicles industry supported by our shared focus on customer-centric innovation and operational excellence. Aebi Schmidt has a proven track record of driving strong financial performance and successfully executing M&A to deliver significant revenue and adjusted EBITDA growth. I firmly believe this strategic combination offers a unique and highly compelling opportunity to create tremendous shareholder value.”

Merger Drives Long-Term Shareholder Value with Compelling Strategic and Financial Benefits

• Scaled-Up Global Leader in North American and European Markets: The transaction creates a leading specialty vehicle producer with a scaled platform in the attractive North American market, representing approximately 75% of the combined company’s revenue, complemented by Aebi Schmidt’s European presence. The combined company will be poised to capitalize on significant growth opportunities in attractive end-markets, including the high-margin commercial truck market in North America.
• Expanded Portfolio Better Positioned to Drive Customer Value and Outsized Growth: The merger brings together two highly complementary product suites, providing customers with a diverse portfolio of leading brands and premium products and services. The combination will enhance the ability to better serve customers and deliver increased value through an expanded production footprint, sales distribution capabilities, innovative solutions, and in-house manufacturing of key vehicle components. These combined capabilities will create a highly competitive company, better positioned to drive outsized growth.
• Unlocks Achievable Synergies: Together, Shyft and Aebi Schmidt expect to generate $20 to $25 million of annual run-rate cost synergies driven by cost optimization and operational efficiency gains across a stronger distribution platform and approximately $5 million in additional adjusted EBITDA opportunity from near-term revenue synergies from cross-selling and geographic expansion. These synergies are expected to be realized by the second year following the close of the transaction, resulting in double-digit EBITDA margins of the combined organization.
• Strengthens Financial Profile: The combined organization is expected to generate long-term profitable growth, stronger margins, and enhanced free cash flow, supporting sustainable value creation and access to lower cost capital. The combined company will have pro forma⁵ 2024 estimated revenue of $1.95 billion⁶ and adjusted EBITDA⁷ of $200 million+, including synergies. Pro forma net debt will be approximately $485 million as of September 30, 2024.
• Delivers Significant Value for Shareholders: The transaction is expected to be accretive to EPS and generate Return on Invested Capital (ROIC) above Weighted Average Cost of Capital (WACC) by the first and third years following the close of the transaction, respectively, creating a highly attractive opportunity for the shareholders of the combined company. The combined company will be positioned to drive additional long-term upside through the acceleration of its growth strategy focused on organic investments, portfolio opportunities, and future M&A opportunities.
• Best-In-Class Management Team with Demonstrated Track-Record: Barend Fruithof, CEO of Aebi Schmidt, will serve as CEO of the combined company and be based in the US. James Sharman, Chairman of Shyft, will serve as the Chairman of the Board of Directors. John Dunn, Shyft CEO, will remain with the company following the close of the transaction to support a seamless integration. Additional leadership will draw on the highly experienced teams of both companies.

Governance Information

The Board of Directors will consist of 11 directors, with five directors nominated by Shyft and six directors nominated by Aebi Schmidt. Seven of these directors will be independent.

Aebi Schmidt majority shareholder Peter Spuhler, an entrepreneurial Swiss-based investor with a strong track record of successful investments in leading industrials companies, will own approximately 35% of the combined company upon completion of the transaction.

Listing Information

Upon completion of the transaction, the combined company will trade on NASDAQ. The company will be a Swiss-domiciled stock corporation, headquartered in Switzerland, with a strong presence and significant footprint in the US.

Transaction Financing, Timing and Approvals

The transaction is expected to close by mid-2025, subject to the satisfaction of customary closing conditions, including receipt of customary regulatory approvals and approval by Shyft shareholders. Shyft and Aebi Schmidt have secured fully-committed financing of the combined company at closing.

 

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