In February this year IDEX Corporation (NYSE:IEX) acquired Akron Brass Holding Corporation, a wholly-owned subsidiary of Premier Farnell plc which produces safety equipment and emergency response equipment, in a cash-free debt-free deal worth $224.2 million. The all-cash deal was conditioned upon the approval of Premier Farnell’s shareholders and subject to post-closing working capital adjustments.
Ohio-based Akron Brass is a world-class leader in manufacturing fire-fighting equipment, such as valves, monitors, nozzles, vehicle-control systems and hand tools. For the trailing twelve months in 2015 it had revenues around $120 million. It was acquired for 1.87x 2015 revenue and 8.80x EBITDA.
Akron Brass acquisition will have the target operate within IDEX Fire and Safety/Diversified Products Unit. IDEX, which is established in Lake Forest, Ill., produces highly-engineered fluidics systems and components that include fire and safety equipment.
With Akron Brass having a global presence in fire-fighting equipment, the transaction is a strategic fit which will expand IDEX’s share in a market they know well. In 2015, IDEX focused on finding new growth opportunities for the Fire and Safety/Diversified Products that would create value and leverage their operational capacities.
The seller Premier Farnell plc distributes engineering solutions for the design, maintenance and repair of electronic systems. Based in the UK, they operate in Europe, the Americas and Asia Pacific. In September 2015 they announced their intention to sell Akron Brass with a view to redirect the attention and resources to developing their core electronics business.
The proceeds from the disposal will be go into repaying the seller’s current debts, redeeming their preference shares and restoring the profits in the fiscal year 2017. According to Reuters, Premier Farnell’s interim dividend sank by 40 percent and they closed their direct operations in Brazil when they announced the sale of Akron Brass in September 2015.
Founded in 1918, Akron Brass merged with Cleveland-based Premier Industrial Corporation in 1962.The Corporation later merged with Farnell plc in 1996 and became Premier Farnell plc.
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