The two companies specialise in smart industrial solutions that help brands, manufacturers and retailers develop, produce and market their products

The two companies specialise in smart industrial solutions that help brands, manufacturers and retailers develop, produce and market their products

Technology specialist Lectra is to acquire US rival Gerber Technology in a EUR300m (US$360.8m) deal that will enable the two companies to hone their software, equipment, data and services to provide "the ultimate Industry 4.0" offering for the fashion sector.

The move, announced today (8 February) would see Lectra acquire the entire capital and voting rights of Gerber Technology. The two companies specialise in CAD software and CAM cutting-room systems that help brands, manufacturers and retailers to develop, produce and market their products.

The combination "will create a premier advanced technology partner, able to quickly meet changing customer needs and deliver even more value through seamlessly integrated solutions," the companies say. Together, they will have a large installed base of product development software and automated cutting solutions in operation, with a worldwide presence and global sales and support teams.

"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, CEO of Gerber.

"Today is a historic day for our companies that will bring tremendous opportunities for future growth," adds Daniel Harari, chairman and CEO of Lectra. "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. 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 will acquire all outstanding shares of Gerber Technology for an upfront payment of EUR175m – through a combination of cash and debt – plus five million newly issued Lectra shares to AIPCF VI LG Funding, an affiliate of private equity firm American Industrial Partners (AIP) that is Gerber Technology's sole shareholder.

This represents a total amount of about EUR300m based on Lectra's closing share price on 5 February 2021. Gerber Technology's revenues were EUR165m in 2020.

Upon closing, Harari will own around 14.6% of the Lectra shares and AIPCF VI LG will own around 13.3%. Harari will continue to be the chairman and CEO of Lectra, while Uberoi will assume a special advisor role to Harari until end-2021.

After the French work council of Lectra is consulted and the binding documentation is signed, completion of the acquisition will remain subject to merger control clearance and other customary conditions and will be submitted to Lectra shareholders for approval.

The companies add: "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, digitalise and optimise their operations."