Parker-Hannifin to acquire LORD Corporation for $3.7B in cash
Parker Hannifin (PH) announced that it has entered into a definitive agreement to acquire LORD Corporation for approximately $3.675B in cash.
The transaction has been approved by the Board of Directors of each company and is subject to customary closing conditions, including receipt of applicable regulatory approvals.
LORD, headquartered in Cary, North Carolina, is a privately-held company founded in 1924 offering a broad array of advanced adhesives, coatings and specialty materials as well as vibration and motion control technologies.
LORD’s products are used in the aerospace, automotive and industrial markets. LORD has annual sales of approximately $1.1B and employs 3,100 team members across 17 manufacturing and 15 research and development facilities globally.
“This strategic transaction will reinforce our stated objective to invest in attractive margin, growth businesses, such as engineered materials, that accelerate us towards top-quartile financial performance,” said Tom Williams, Chairman and CEO of Parker.
“LORD will significantly expand our materials science capabilities with complementary products, better positioning us to serve customers in growth industries and capitalize on emerging trends such as electrification and lightweighting.
Upon closing of the transaction, LORD will be combined with Parker’s Engineered Materials Group.
Parker plans to finance the transaction using new debt.
Following the completion of the transaction, Parker expects to maintain a high investment grade credit profile.
The transaction is not expected to impact Parker’s dividend payout target averaging approximately 30-35% of net income over a five-year period, while maintaining its record of annual dividend increases.
The transaction is expected to be completed within the next four to six months and is subject to customary closing conditions, including receipt of applicable regulatory approvals.
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