Stewart Systems and AMF Bakery Systems Sign Merger Agreement
PLANO, TX and RICHMOND, VA - Stewart Systems Inc. of Plano, Texas and AMF Bakery Systems of Richmond, Virginia and Sherbrooke, Canada have signed a definitive agreement to merge the ownership of the companies. According to Nand Kumar, CEO of Stewart Systems, "We have worked with AMF on most of the major projects in the United States and abroad over the past few years. We realized that we can best support our customers through common ownership to provide more focused execution by each company." The merger is expected to close by March 31, 2008.
"AMF will continue to operate as AMF and Stewart will operate as Stewart," added Ken Newsome, President and CEO of AMF Bakery Systems. "Stewart and AMF were feeling the same pressure from customers who want both leading technology as well as integrated solutions. However, it is impossible to be all things to all people. This will allow AMF to focus on Dough Processing (mixing and make-up) at the front of the bakery as well as the Wrap Room (packaging and distribution) at the back of the bakery while Stewart will focus on all Thermal Processing (proofing, baking, cooling and pan systems) in the middle of the bakery."
Stewart Systems, Inc. was founded in 1947 and was purchased by the UCA Group, which is controlled by Nand Kumar, in 2003. Stewart operates out of a 200,000 sq. ft. facility in Plano, Texas. AMF Bakery Systems, founded in 1915, operates out of 150,000 sq. ft. facility in Richmond, Virginia and a 125,000 sq. ft. facility in Sherbrooke, Canada. Newsome purchased AMF in 1996 with a group of investors and Markel Corporation (NYSE: MKL) replaced all outside investors in 2005. AMF and Stewart already share sales and service offices in the United Kingdom and Asia.
"I am excited about Stewart's ability to focus on the thermal aspects of baking so that we may advance our technology," stated Len Kilby, President of Stewart Systems. "With the technology that we have developed, plus AMF's recent success in tray and tunnel ovens, we will be able to provide a comprehensive portfolio of pan handling, proofing, baking and cooling solutions to the bread, roll and tortilla segments." Tim Cook, Vice President of Sales and Marketing for AMF, added, "AMF's core strength is in mixing and make-up as well as packaging and distribution. We have been spending effort on conveying and oven systems in order to provide a complete solution. With a full partner in Stewart focusing on the middle of the bakery, we will be able to focus our efforts on our fully integrated solutions in the front and back of the bakery." Ken Newsome added, "I firmly believe this will enable both AMF and Stewart to be more focused and responsive companies in order to provide the best solutions for our customers' needs. We will be better positioned to provide leading technology, breakthrough service, and to provide a better value while doing so."
The new holding company for both Stewart and AMF will be called Ceres Industries. The board of directors will be split evenly between Stewart and AMF shareholders. Markel Corporation will continue to supply capital for expansion of the company. Nand Kumar will serve as the CEO of Ceres Industries while Ken Newsome will serve as the president. "When you combine the operating strengths of Stewart and AMF with the long-term capital commitment of Markel, we believe we can create a truly exceptional company," concluded Nand Kumar.
Please contact Len Kilby (972) 509-8743 or Tim Cook (804) 342-9711 if you have any questions.
Insurance company takes majority stake in AMF Bakery Systems
RICHMOND, VA. - A majority stake in AMF
Bakery Systems, Richmond, has been acquired by Markel Corp., an
international property and casualty insurance holding company, also
based in Richmond.
Kenneth Newsome, AMF president, said Markel has bought out a group
of non-management private investors who have had a majority stake
in the bakery equipment company since 1996. In addition to buying
out the investment group, Markel has infused AMF with additional
capital.
Since the mid-1990s when the investor group acquired AMF, the company
grew through major acquisitions, including purchases in 2000 of
Convay Systems of Toronto; in 1999 of Pulver Systems, Inc., Chicago
Ridge, Ill.; in 1998 of E.T.M.W. Enterprises Ltd., Sherbrooke, Quebec;
and in 1997 of Campbell Technologies, Inc., Atlanta.
Mr. Newsome said Markel's approach to its AMF Bakery stake is different
from that of the investor group that has owned the business for
the past decade.
"Markel is an insurance company that invests for the long
term," he said. "They wanted to make a move into control
investments in private companies instead of just investments in
publicly-traded companies. They decided their first investment in
a private company would be in AMF Bakery Systems. Now AMF has partner
that is making a 20-year investment and has strengthened our balance
sheet. They want us to become a stronger company every year, indefinitely."
With AMF since 1996, Mr. Newsome was part of the investor group
that bought AMF but said he did not sell any of his shares as part
of the transaction with Markel. He said other top managers have
maintained their ownership of the business as well and that no significant
management changes were expected to result from the Markel purchase.
"In AMF, the industry now has a major supplier with the financial
stability to give baking companies confidence that we will be around
long into the future," he said. "Unfortunately, this has
been a serious issue for the industry for some time."
Markel was founded in the 1920s by Samuel A. Markel. Its shares
trade on the New York Stock Exchange. The company has a $3.1 billion
market capitalization. AMF is a leading supplier of equipment, parts
and service to the wholesale bakery industry.