Baker McKenzie advised Tennant Company (NYSE: TNC), a world leader in designing, manufacturing and marketing solutions that help create a cleaner, safer world, in its agreement with private equity fund Ambienta to acquire IPC Group, a privately held designer and manufacturer of commercial cleaning solutions based in Italy in an all-cash transaction valued at approximately $350 million. In 2016, IPC Group generated annual sales of approximately $205 million. When finalized, this will be the largest acquisition in Tennant Company history. Tennant anticipates that the acquisition will be accretive to 2018 full year earnings per share.
"Acquiring IPC Group is a strategic move that aligns with our growth aspirations," said Chris Killingstad, Tennant Company president and chief executive officer. "IPC Group significantly increases our presence and market share in Europe, and more than doubles Tennant’s current EMEA business. We will gain the scale to accelerate both Tennant’s and IPC Group’s growth, and better leverage our cost structure in EMEA. Importantly, our businesses are highly complementary and differentiated in our geographies, products and go-to-market approach."
More than 80 percent of IPC Group’s business is concentrated in Europe, with the remaining percentage split evenly between the Americas and the Asia Pacific regions. In addition to expanding Tennant’s EMEA market coverage, IPC Group’s brands broaden Tennant’s range of product offerings. The companies’ brands see little overlap due to their differentiated market positions.
Tennant's products include equipment for maintaining surfaces in industrial, commercial and outdoor environments; detergent-free and other sustainable cleaning technologies; and coatings for protecting, repairing and upgrading surfaces. Tennant's global field service network is the most extensive in the industry.
IPC Group produces small- to mid-sized commercial cleaning machines and equipment, including floor sweepers and scrubbers, vacuum cleaners, high-pressure washers, and related aftermarket parts and services. IPC Group also expands Tennant’s product portfolio to cleaning tools and supplies, such as multi-purpose cleaning trolleys, window-washing systems, antibacterial microfiber mops and cloths, and a wide array of consumables. Like Tennant, IPC Group is committed to product innovation and sustainability, with a focus on reducing energy, water and detergent use.
IPC Group sells its products under the brand names IPC, IPC Foma, IPC Eagle, IPC Gansow, ICA, Vaclensa, Portotecnica, Sirio and Soteco, Readysystem, Euromop, and Pulex. Both companies’ brands will continue to operate in their markets, as they do today. The companies also have highly complementary sales channels. Tennant anticipates that this will provide incremental sales opportunities for both companies going forward.
The Baker McKenzie team advising Tennant is led by M&A Partner Dieter Schmitz in Chicago along with Alberto Semeria and Anna Marina De Vivo (Milan), Thomas Doyle, Carole Spink, and Jae Cho (Chicago), Michael Herington, Phelim O'Doherty, and James Heller (London), Koen Vanhaerents, Fiona Carlin and Werner Berg (Brussels), Lara Schwartzmann (Sao Paulo), Howard Wu (Shanghai), Stephane Davin (Paris), Jorge Adell (Barcelona) and Tino Marz (Munich).
"We are honored to represent Tennant as it significantly expands its presence in the EMEA region," Schmitz said. "The company is a market leader in cleaning products and solutions, and we look forward to continuing to work closely with Tennant's talented team as it unlocks the value of this transformative cross-border deal."
The Tennant deal team consists of Heidi Wilson, SVP, General Counsel and Secretary, Tom Paulson, SVP and Chief Financial Officer, Jim Stoffel, Vice President – Finance, Global Planning and Analysis and Strategy, Tom Stueve, VP and Treasurer, Global Tax and Treasury, and Kristin Stokes, Deputy General Counsel.
"With Tennant facing the largest transaction in its history, I called upon Dieter Schmitz to lead the Baker McKenzie cross-border team, who worked seamlessly with our experienced in-house team," said Heidi Wilson, Senior Vice President, General Counsel at Tennant.
Added Kristin Stokes, Tennant's Deputy General Counsel, "Partnering with Baker McKenzie around the world - on a 24/7 basis - allowed Tennant to leverage our resources to execute this strategic deal and position our company for the future."
Tennant expects the acquisition to be completed in the 2017 second quarter. The timing is subject to customary conditions and regulatory approvals.
