Manufacturing technology specialist Lectra has announced plans to acquire the entire capital and voting rights of its rival, US-based Gerber Technology.

A key Industry 4.0 player in the fashion, automotive and furniture industries, Lectra designs smart industrial solutions 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, enabling its customers to boost the productivity and profitability of their operations.

After Lectra's French work council is consulted and the binding documentation is signed, completion of the acquisition shall remain subject to merger control clearance and other customary conditions, and will 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 pandemic make it more important than ever for them to transform, digitalise and optimise their operations, states Lectra.

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 and Lectra will create a premier advanced technology partner, able to quickly meet changing customer needs and deliver even more value through 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. 

Gerber's CEO Mohit Uberoi, who would assume the role of special advisor to Lectra's chairman and CEO, Daniel Harari, until the end of 2021, says: “It has been an honour 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.”

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.

“Today is a historic day for our companies that will bring tremendous opportunities for future growth," states Daniel Harari. "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. 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.” 

Under the proposed acquisition, Lectra would acquire all outstanding shares of Gerber Technology on a cash-free, debt-free basis, for an upfront payment of €175m – through a combination of cash and debt – plus 5 million newly issued Lectra shares to AIPCF VI LG Funding, LP (an affiliate of American Industrial Partners that is Gerber Technology’s sole shareholder). This would represent a total amount of about €300m, based on Lectra’s closing share price on 5th February, 2021. Gerber Technology’s revenue in 2020 was €165m.