Parker Hannifin To Buy Exotic Metals Forming Co. For $1.725 Bln In Cash

(RTTNews) - Parker Hannifin Corp. (PH) said Monday it has agreed to acquire privately-held Exotic Metals Forming Co. LLC for $1.725 billion in cash. The net transaction value is about $1.56 billion, when adjusted for approximately $170 million of expected tax benefits.

Parker noted that the acquisition will add about $450 million in expected annual sales to its aerospace business, with long-term agreements in place for high growth, high volume programs.

The transaction has been approved by the board of directors of each company and is subject to customary closing conditions. It is expected to be completed within the next two to three months.

Kent, Washington-based Exotic Metals was founded in 1966. The company designs and manufactures high temperature, high pressure air and exhaust management solutions for aircraft and engines.

Exotic Metals has expected annual sales of about $450 million and employs 1,600 team members across three locations in the U.S.

Tom Williams, Chairman and Chief Executive Officer of Parker, 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."

Parker expects the transaction to be accretive to organic growth, EBITDA margins, earnings per share and cash flow, excluding one-time costs.

Upon the closing of this transaction, Parker plans to have Exotic Metals operate as a standalone division within its Aerospace Group, which is led by Roger Sherrard, Vice President and President Aerospace Group.

Parker said it does not expect the transaction to impact its dividend payout target of approximately 30 to 35 percent average percent of net income over a five-year period, while maintaining its record of annual dividend increases.