Middleby’s Breakup: Seriously?

So, everybody’s splitting up these days. Honeywell, DuPont, Johnson & Johnson… it’s like a corporate divorce epidemic. They all say it’s to “unlock shareholder value.” Right. Like value was locked in the first place. It’s just… inconvenient. And now Middleby? Honestly, the whole thing feels… contrived.

Middleby, for those keeping track—and why would you be, frankly?—had three parts. Commercial foodservice, food processing, and residential kitchens. They’re spinning off food processing, selling off part of the kitchen stuff for $540 million. $540 million! It’s a number. And what’s left? Commercial foodservice. They’ll be making… things for restaurants. It’s not exactly groundbreaking. It’s like rearranging the deck chairs on the Titanic, except the Titanic is… a moderately successful industrial equipment company.

The Acquisition Game: It’s Just… A Lot

Apparently, Middleby built itself by buying up smaller companies. Little equipment makers. They’d pay, oh, seven to ten times earnings. Earnings! As if those things are actually predictable. Then they’d jam them into the Middleby system and try to squeeze out a 15% margin improvement. Fifteen percent! Where do they come up with these numbers? It’s just… aggressive. And then they expect the market to reward them for it. Like we’re all just supposed to be impressed.

They did it with commercial foodservice, making ovens and grills for places like McDonald’s and Starbucks. Ventless ovens! It’s a marvel of engineering, I guess. They did it with food processing, growing that segment from three million to eight hundred million. Eight hundred million! It’s just… a lot of processed food. And now they’re trying to do it again. With the spin-off. It’s a whole cycle of buying, squeezing, and… splitting. It’s exhausting just thinking about it.

The whole point of the spin-off, they say, is to give food processing its own stock and let it go off and… acquire things. Like that’s going to solve anything. A company with less than a billion in revenue is supposed to be an acquisition vehicle? It’s… optimistic. They need the stock to trade at a higher multiple. A rich multiple. As if that’s just going to happen. And they expect us to believe they’re “significantly undervalued.” It’s insulting, really.

And who’s going to pay for all this? Commercial foodservice, naturally. They’ve got the cash flow. $1.9 billion in net debt. It’s just… convenient. They’re the reliable one. The responsible one. While food processing goes off and… gambles. It’s just not fair to commercial foodservice, is it?

What Are They Worth, Anyway?

They haven’t even filed the Form 10 yet, so nobody knows how the debt is going to be split. It’s chaos. But some “back-of-the-envelope math” (as if that’s a legitimate thing) suggests an enterprise value of around $11.5 billion. $11.5 billion! It’s just… a number. And an equity value of $9.6 billion. Against a current market cap of $8.5 billion. A gap of a billion dollars. That’s what they’re trying to close. It’s… ambitious.

But it all assumes that food processing profitability will “normalize.” Normalize! Like there’s some inherent, natural state of profitability that they’re just waiting to return to. And that tariffs and international demand will magically improve. It’s… wishful thinking. They’ve also been buying back shares. Cutting the share count by 6.4%. Reloading the buyback program with $540 million. It’s just… distracting. Like they’re trying to fix things with accounting maneuvers. It’s infuriating.

The spin-off is targeted for the second quarter of 2026. 2026! That’s ages from now. And they expect food processing margins to improve this year. This year! It’s just… a lot to ask. Another quarter of results, and the Form 10 details… and then maybe, just maybe, we’ll have a clearer picture. But honestly, I doubt it. I just… doubt it.

2026-02-28 18:12

The Acquisition Game: It’s Just… A Lot

What Are They Worth, Anyway?

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