Lectra announces its plan to acquire the entire capital and voting rights of US-based Gerber Technology. A key Industry 4.0 player in the fashion, automotive and furniture industries, Lectra designs smart industrial solutions – software, equipment, data and services – that help brands, manufacturers and retailers develop, produce and market their products.
The acquisition, if and when consummated, would allow Lectra to complement its market position and continue to enhance its offerings based on Industry 4.0 technology that will enable its customers to boost the productivity and profitability of their operations. After the French work council of Lectra is consulted and the binding documentation is signed, completion of the acquisition shall remain subject to merger control clearance and other customary conditions and shall be submitted to Lectra shareholders for approval.
The proposed combination would occur at an opportune time for both companies and their customers. The current uncertain economic climate and unprecedented challenges that fashion, automotive and furniture companies are facing due to the COVID-19 pandemic make it more important than ever for them to transform, digitalize and optimize their operations.
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For over 50 years, Gerber Technology has used its proprietary technologies and deep domain expertise to provide integrated software and automated hardware solutions to companies around the world, including over 100 Fortune 500 companies in 134 countries.
The strategic combination of Gerber Technology and Lectra will create a premier advanced technology partner, able to quickly meet changing customer needs and deliver even more value through seamlessly integrated solutions. Together, the two companies will have a large installed base of product development software and automated cutting solutions in operation, with a worldwide presence and a long list of prestigious customers.
Consolidating the two companies’ research and development capabilities will enable the combined company to accelerate development of Industry 4.0 technologies and help its expanded customer base seize the full potential of these innovations.
“It has been an honor to lead the transformation of Gerber Technology and create an efficient, comprehensive platform that enables our customers’ digital transformation initiatives. Gerber Technology and Lectra share a long history of innovation and excellent customer service that, brought together, will create an even stronger company that provides best-in-class technology solutions and services to our customers globally,” says Mohit Uberoi, Chief Executive Officer, Gerber Technology.
The combined company’s broader global reach will allow it to boost service capabilities to customers around the world thanks to greater resources and the joint force of Gerber Technology and Lectra’s sales and support teams.
Integrating the technology of the two companies will endow them with the resources to anticipate and address rapidly changing market conditions.
“Today is a historic day for our companies that will bring tremendous opportunities for future growth. We will have investments in innovation and technological capabilities that will be highly beneficial to the industry. They will allow us to create long-term value for our customers and our shareholders,” states Daniel Harari, Chairman and Chief Executive Officer, Lectra. “We’re delighted to welcome Gerber Technology’s group of talented professionals to the Lectra team. Unifying the two teams will showcase the strength of our fantastic employees. Together, we will be able to grow and expand the services we provide to our customers and help them accelerate their digital transformation.”
Key transaction terms
Under the proposed acquisition, Lectra would acquire all outstanding shares of Gerber Technology on a cashfree debt-free basis for an upfront payment of 175 million euros – through a combination of cash and debt – plus 5 million newly issued Lectra shares to AIPCF VI LG Funding, LP (“AIPCF VI LG”), an affiliate of American Industrial Partners that is Gerber Technology’s sole shareholder. This would represent a total amount of about 300 million euros based on Lectra’s closing share price on February 5, 2021. No contingent consideration is contemplated.
Gerber Technology’s revenues was 165 million euros in 2020.
Thanks to the strong value creation deriving from significant synergies, Lectra expects the transaction to be accretive for shareholders from 2022.
Upon closing, Daniel Harari would own c. 14.6% of the Lectra shares and AIPCF VI LG would own c. 13.3%.
Lectra’s Board of Directors would welcome a director representing AIPCF VI LG.
Daniel Harari would continue to be the Chairman and Chief Executive Officer of Lectra. Gerber Technology Chief Executive Officer, Mohit Uberoi, would assume special advisor to Daniel Harari role until end-2021.
Lectra’s shareholders would be invited to vote on the issuance of the 5 million new Lectra shares reserved to AIPCF VI LG at a dedicated Extraordinary Shareholders’ Meeting which is currently expected to be held on April 30, 2021. A report containing additional information will be made available to the shareholders prior to the Extraordinary Shareholders’ Meeting.
Lazard is acting as exclusive financial advisor to Lectra, and Latham & Watkins as legal counsel to Lectra.
Goldman Sachs is acting as exclusive financial advisor to AIPCF VI LG, and Ropes & Gray LLP, Baker Botts LLP and Gide Loyrette Nouel A.A.R.P.I. as legal counsel to AIPCF VI LG.
2020 results, update on the 2020-2022 strategic roadmap and guidance for the coming years will be disclosed on February 10, 2021.
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Lectra management will discuss the transaction, provide forward-looking guidance for the combined company upon closing of the transaction and answer questions from the financial community during the February 11, 2021 webcast Analyst Conference meeting in French starting at 8:30 am (CET - Paris).
About Lectra
For companies that breathe life into our wardrobes, car interiors, furniture and more, Lectra is crafting the premium technologies that facilitate the digital transformation of their industry. Lectra’s offer empowers brands, manufacturers and retailers from design to production, providing them with the market respect and peace of mind they deserve. Founded in 1973, today Lectra has 34 subsidiaries across the globe, serving customers in over 100 countries. With close to 1,800 employees, Lectra reported revenues of 280 million euros in 2019. Lectra is listed on Euronext (LSS).
For more information, please visitwww.lectra.com.
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Lectra Software Pattern Making
Lectra is the world leader in integrated technology solutions (software, CAD/CAM equipment and associated services) dedicated to industries using soft materials: textiles, leather, industrial fabrics and composite materials. Its solutions encompass business processes enabling companies to automate, streamline and accelerate product design, development and manufacturing.
With 1,550 employees worldwide, 230 R&D engineers and technicians, 5 call centers, Lectra Serves 20,000 customers in more than 100 countries operating in a broad array of major global market sectors including fashion (apparel, accessories, footwear), automotive (car seats and interiors, airbags) and furniture as well as a wide variety of other industries, such as the aeronautical and marine industries, wind power, personal protective equipment, etc. Lectra draws its strength from its passion for innovation and the long-term value-creating relationships it maintains with its customers. Lectra technologies enable them to face the growing demand for rapid turnover of models, to display ever grater creativity and flexibility, and to produce faster, better, and at lower cost, in order to be more competitive. Lectra offers value-added solutions geared to the specific needs of each sector within an extended-enterprise context, facilitating collaborative work and secure data exchanges.
For the fashion market, Lectra’s array of competencies spans the entire value chain, integrating process optimization and collection lifecycle management. Lectra is uniquely positioned on the product Lifecycle Management (PLM) market thanks to its solution specifically designed for the fashion industries, backed by its expertise built on several decades of shared experience with its customers.
SMART PRODUCT DEVELOPMENT
- The Powerful Solution Pattern Making, Grading, and 3D Virtual Prototype
- Save on Pattern and sample costs with Lectra’s Revolutionary Approach to Apparel Product Development.
- 3D Technology revolutionizes sampling by giving companies the test style and fit choices before they become final without incurring cost
- Virtual sampling has the potential to cut development time while reducing cost.
- can be estimated pattern marker calculation and forecast fabrics consumption in the time of product development
- Intelligent links can be used to connect related pattern pieces to enable more efficient pattern making and grading.
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SPREADING QUALITY
- Accurate digitally controlled spreading operations
- Tension-free laying technology
PERFORMANCE
- High speed laying
- Fast loading (offloading)
FLEXIBILITY
- Versatile laying accessories
- Pre-set parameters
INTELLIGENCE
- Operations & fabric use analysis
- Fabric management system with bar-coding (option)
RELIABILITY
- Sturdy construction, reinforced parts and components, no relays: giving maximum uptime.
USER-FRIENDLINESS.
- Easy-to-use and ergonomic control
- panel to save preparation time
CUTTING QUALITY & PERFORMANCE
- Optimized cutting of tangent pieces
- Dynamic vacuum control
- Video-assisted spread control
- Digital blade compensation system
- Built-in blade sensors with automatic
- calibration
- Cutting while conveyor advances(Eclipse patent)
ANTI-ERROR SYSTEMS
- Blade breakage detection
- Automatic spread height control
- Automatic cutting path optimization
ECO FOOTPRINT
- Energy saving
- Restart after power cut
- Automatic energy conservation
- Permanent bristle block cleaner
- Long life consumables
VISUAL MANAGEMENT
- Light indicators on exhaust & cutting head
- Electric consumption metrics
- Real time process tracking
- Vacuum & blade real-time activity
- indicators
- Blade wear display
- Cutting dashboard
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