Expands Ability to Help
Ensure Safety, Traceability and Compliance in the Food and Beverage
Industry, Aligns with Veralto's Commitment to
Safeguarding Water, Food and Essential Goods
WALTHAM,
Mass., Oct. 7, 2024 /PRNewswire/ -- Veralto
Corporation (NYSE: VLTO) (the "Company"), a global leader in
essential water and product quality solutions dedicated
to Safeguarding the World's Most Vital Resources™,
announced that it has acquired the holding company that owns
TraceGains for a purchase price of $350
million (subject to customary post-closing adjustments).
TraceGains is a leading provider of cloud-based software
solutions that enable connected data and digital workflow
management to help consumer brands meet increasingly stringent
compliance and reporting regulations for food and beverage safety
and traceability. Its solutions enable consumer brands to
efficiently track ingredient inputs, monitor supplier quality and
develop new products with greater safety and increased
velocity.
TraceGains is complementary to the Company's Product Quality and
Innovation ("PQI") segment, specifically, its Esko-branded digital
workflow solutions for packaging and label design. Synergies with
Esko's global customer base, direct sales channel, and the
application of the Veralto Enterprise System represent key value
creation levers the Company believes will accelerate TraceGains'
growth, expand its market presence, and improve its operating
efficiency.
"We believe the transition to digital workflow solutions in the
food and beverage industry is poised for strong growth over the
next decade. The acquisition of TraceGains, in combination with our
Esko business, strategically expands our digital offering and
provides us the opportunity to deliver greater value to consumer
brands as they digitize critical workflows with connected data
across new product development, compliance and packaging," said
Jennifer L. Honeycutt, Veralto's
President and Chief Executive Officer. "TraceGains' purpose-built
solutions, focused on increasing food safety, are complementary to
our PQI product portfolio and squarely aligned with our purpose --
Safeguarding the World's Most Vital Resources™. And with a
high level of recurring revenue, robust core sales growth and
attractive gross margins, TraceGains strengthens the financial
profile of our PQI segment. We are excited to welcome
TraceGains associates to Veralto."
TraceGains' Chief Executive Officer, Gary Nowacki, said "We are proud of the
networked ecosystem TraceGains has built for the food and beverage
industry and the tremendous growth we have delivered. We believe
joining Veralto and partnering with its Esko business creates
a powerful combination of two brands with deep expertise in digital
workstream solutions for consumer brands. Furthermore, it
enhances TraceGains' ability to more rapidly expand industry
use of our digital solutions that help customers increase
transparency to ingredient inputs for food and beverage safety,
speed up innovation of new recipes and significantly reduce
time-to-market for new products."
In 2024, TraceGains is expected to deliver just over
$30 million in sales, with more than
95% of sales on a recurring basis, and a gross margin of
approximately 80%. Since the beginning of 2022, TraceGains'
sales have grown at an average rate of greater than 20% on a
year-over-year basis.
The acquisition was funded with cash on hand and is expected to
deliver a double-digit return on invested capital, exceeding the
Company's weighted average cost of capital, in year 6.
Veralto's management team will discuss this acquisition in more
detail during its third quarter 2024 financial results conference
call on Thursday, October 24,
2024.
ABOUT VERALTO
With annual sales of $5 billion,
Veralto is a global leader in essential technology solutions with a
proven track record of solving some of the most complex challenges
we face as a society. Our industry-leading companies with globally
recognized brands are building on a long-established legacy of
innovation and customer trust to create a safer, cleaner, more
vibrant future. Headquartered in Waltham,
Massachusetts, our global team of 16,000 associates is
committed to making an enduring positive impact on our world and
united by a powerful purpose: Safeguarding the World's Most
Vital Resources™.
ABOUT TRACEGAINS
For over 15 years, TraceGains' solutions have empowered food and
beverage stakeholders to build more transparent, efficient and
interconnected supplier networks that deliver safer, more compliant
products to customers in less time. Using the power
of TraceGains' differentiated network, global brands gain
digital visibility to over 550,000 ingredients and items from more
than 80,000 supply chain locations which provides greater speed and
control over compliance, enhances new product development and
increases go-to-market velocity.
USE OF NON-GAAP FINANCIAL INFORMATION
Veralto supplements its consolidated financial statements
presented on a GAAP basis with certain non-GAAP financial
information, to provide investors with greater insight, increase
transparency and allow for a more comprehensive understanding of
the information used by management in its financial and operational
decision-making. References to the non-GAAP financial measure of
return on invested capital refers to the gross purchase price of
the acquisition divided by the net operating profit after taxes of
the acquired business. The non-GAAP financial measure disclosed by
Veralto in this press release should not be considered a substitute
for, or superior to, financial measures prepared in accordance with
GAAP, and the financial results prepared in accordance with GAAP
and reconciliations from these results should be carefully
evaluated.
TRACEGAINS FINANCIAL INFORMATION
The financial information of TraceGains provided herein is
unaudited and is derived from information provided to Veralto by
TraceGains' management in conjunction with due diligence
procedures, with various Veralto management adjustments also
reflected. This information has not been conformed to the
accounting principles (GAAP) and accounting policies followed by
Veralto. Further, the definitions of performance measures of the
TraceGains' business, such as sales, gross margin and operating
profit, may not align with the definition of Veralto.
FORWARD-LOOKING STATEMENTS
Certain statements in this release, including the statements
regarding TraceGains' future financial performance, the Company's
differentiation and positioning to continue delivering sustainable,
long-term shareholder value and any other statements regarding
events or developments that we believe or anticipate will or may
occur in the future are "forward-looking" statements within the
meaning of the federal securities laws. All statements other than
historical factual information are forward-looking statements,
including, without limitation, statements regarding: projections of
revenue, expenses, profit, profit margins, tax rates, tax
provisions, cash flows, pension and benefit obligations and funding
requirements, Veralto's liquidity position or other financial
measures; Veralto's management's plans and strategies for future
operations, including statements relating to anticipated operating
performance, cost reductions, restructuring activities, new product
and service developments, competitive strengths or market position,
acquisitions and the integration thereof, divestitures, spin-offs,
split-offs or other distributions, strategic opportunities,
securities offerings, stock repurchases, dividends and executive
compensation; the effects of the separation or the distribution on
Veralto's business; growth, declines and other trends in markets
Veralto sells into; new or modified laws, regulations and
accounting pronouncements; future regulatory approvals and the
timing thereof; outstanding claims, legal proceedings, tax audits
and assessments and other contingent liabilities; future foreign
currency exchange rates and fluctuations in those rates; general
economic and capital markets conditions; the anticipated timing of
any of the foregoing; assumptions underlying any of the foregoing;
and any other statements that address events or developments that
Veralto intends or believes will or may occur in the future.
Additional information regarding the factors that may cause actual
results to differ materially from these forward-looking statements
is available in our SEC filings, including our 2023 Annual Report
on Form 10-K and Quarterly Reports on Form 10-Q. These
forward-looking statements speak only as of the date of this
release and except to the extent required by applicable law, the
Company does not assume any obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events and developments or otherwise.
Investor Relations Contact:
Ryan Taylor
Vice President, Investor Relations
investors@veralto.com
Media Relations Contact:
Steve
Field
Vice President, Communications
steve.field@veralto.com
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SOURCE Veralto