Two companies that have always tried to share the market as equals are expected to merge: French cad/cam specialist Lectra announced today that it has signed a letter of intent to acquire Gerber Technology.

The plan is to acquire all the capital and voting rights of the U.S. company. The acquisition would allow Lectra to complete its market position and further expand all Industrie 4.0 technology-based offerings that enable customers to increase the productivity and profitability of their operations. Consultation with Lectra’s Works Council has already taken place and all the necessary documents have been signed. The takeover is currently being submitted to Lectra shareholders for control and is also subject to antitrust approval.

According to Lectra, the takeover would come at a favorable time for both companies and their customers. Given the current uncertain economic climate and the unprecedented challenges facing fashion, automotive and furniture companies due to the COVID 19 pandemic, it is more important than ever to transform, digitize and optimize operations.

The strategic merger of Gerber Technology and Lectra creates an advanced technology partner capable of quickly responding to changing customer needs and delivering even greater value through seamlessly integrated solutions. Together, the two companies have a large installed base of product development software and automated cutting solutions around the globe, including many renowned manufacturers, and would offer a global presence.

By combining all the research and development capabilities of the two companies, the development of Industrie 4.0 technologies should once again be accelerated – ultimately benefiting all customers.

“It has been an honor to accompany Gerber Technology’s further development to create an efficient, comprehensive platform that enables our customers’ digital transformation efforts in the first place. Gerber Technology and Lectra share a long history of innovation and excellent customer service, which together will create an even stronger company that provides world-class technology solutions and services to our customers worldwide,” said Mohit Uberoi, Chief Executive Officer of Gerber Technology.

“Today is a historic day for our companies that will bring tremendous opportunities for future growth. We will make investments in innovation and technological capabilities that will be of great benefit to the industry. These investments will enable us to create long-term value for our customers and our shareholders,” said Daniel Harari, Chairman and Chief Executive Officer of Lectra. “We are pleased to welcome so many talented professionals from Gerber Technology to the Lectra team. Bringing the two teams together will further showcase the capabilities of our fantastic employees. Together, we will be able to expand the services we offer our customers and help them accelerate their digital transformation.”

Under the proposed acquisition, Lectra would acquire all of the issued shares of Gerber Technology valued at approximately 175 million euros, in return for which AIPCF VI LG Funding, a subsidiary of American Industrial Partners and majority shareholder of Gerber Technology, would acquire an interest in Lectra through 5 million newly issued shares. This would represent a total amount of approximately €300 million based on the closing price of Lectra shares on February 5, 2021. No contingent consideration is contemplated. Gerber Technology’s 2020 sales were 165 million euros.

Thanks to strong value creation through significant synergies, Lectra expects the transaction to be accretive to Lectra shareholders from 2022. Upon completion of the transaction, Daniel Harari would own approximately 14.6 percent of Lectra shares and AIPCF VI LG approximately 13.3 percent. An additional management position would be added to LEctra’s existing management team, representing AIPCF VI LG’s interests there.

Daniel Harari intends to remain Lectra’s Chairman and Chief Executive Officer. Mohit Uberoi, previously Chief Executive Officer of Gerber Technology, is expected to take on a role as special advisor to Daniel Harari until the end of 2021.

Lectra shareholders are now required to vote on the issue of the 5 million new Lectra shares to AIPCF VI LG at a specially convened extraordinary general meeting. The meeting is scheduled for April 30, 2021.

The French company plans to announce Lectra’s 2020 results, an update on its strategic roadmap for 2020 to 2022, and its outlook for the coming years on February 10, 2021.