Middleby Corporation (MIDD) stock surged 12.26% in the pre-market session on Wednesday, following the company's announcement to separate its Food Processing business into a stand-alone publicly traded company. The move comes after a robust fourth quarter performance, with the company reporting record cash flows and solid margins across all three business segments.

The planned spin-off aims to unlock further value and growth opportunities for both the Middleby Food Processing business and the remaining Commercial and Residential kitchen equipment businesses. As separate entities, the companies will have greater strategic focus, optimized capital structures, and enhanced opportunities for mergers and acquisitions.

In the fourth quarter, Middleby reported record adjusted EBITDA of over $251 million, reflecting a margin of 24.8%. The Food Processing segment delivered organic revenue growth of 4.7% and an adjusted EBITDA margin of 29.6%. The Commercial segment achieved revenues of over $609 million, with margins exceeding 28%, while the Residential segment posted an adjusted EBITDA margin of 13%, the highest level in 1.5 years.

For the full year 2024, Middleby generated over $640 million in free cash flows, demonstrating its strong cash generation capabilities. The company plans to utilize around 20% of its free cash flow for share repurchases in 2025, highlighting its commitment to returning capital to shareholders.

Looking ahead, Middleby expects to deliver low-single-digit organic revenue growth in 2025, with profitability growth exceeding its organic revenue growth rate. The company anticipates sequential improvement throughout the year across all segments, driven by favorable long-term drivers and recent product innovations.