Parker Hannifin Corp. is set to acquire Exotic Metals Forming Company LLC for $1.725 billion in cash. The Kent, Washington, privately held manufacturer of high temperature, high pressure air and exhaust management solutions for aircraft and engines has expected annual sales of approximately $450 million and 1,600 U.S. employees.
Parker Chairman and CEO Tom Williams said, “Exotic will significantly bolster our already strong aerospace offering with complementary products for performance-critical applications. As a result of the acquisition, we will be better positioned to accelerate growth through increased aftermarket opportunities and expanded content on industry leading programs. The acquisition is expected to drive substantial value for Parker’s shareholders. We expect the transaction to be accretive to organic growth, EBITDA margins, EPS and cash flow, excluding one-time costs.”
Parker expects to realize approximately $13 million in pre-tax run-rate synergies by fiscal year 2023 by combining supplier networks and implementing Win Strategy initiatives. The cumulative cost to achieve these synergies is expected to be approximately $5 million.
Parker plans to have Exotic Metals operate as a standalone division within Parker’s Aerospace Group, which is led by Roger Sherrard, Vice President and President Aerospace Group.
The transaction is not expected to impact Parker’s dividend payout target of approximately 30-35 percent average percent of net income over a five-year period, while maintaining its record of annual dividend increases.
Barclays is serving as financial adviser and Jones Day is serving as legal counsel to Parker. Lazard is serving as financial adviser and Perkins Coie is serving as legal counsel to Exotic Metals.