Industrial products maker Ingersoll Rand Inc IR has entered into an agreement to acquire ILC Dover from the investment firm New Mountain Capital, LLC.
The deal includes an upfront cash purchase price of about $2.325 billion and an earnout tied to select operating efficiency metrics in 2024.
At its maximum payout, the earnout increases the 17x upfront purchase multiple by less than one turn.
ILC designs and produces solutions for biopharmaceutical, pharmaceutical, and medical device markets and is also a supplier for the space industry.
ILC, with about 2,000 team members, serves its global customer base across 11 engineering and production facilities located in North America, Europe, and Asia.
Under the agreement, Ingersoll Rand will establish a life sciences platform within its P&ST segment, consisting of ILC plus Ingersoll Rand’s life science-focused brands and ILS.
The acquisition is expected to expand Ingersoll Rand’s addressable market by more than $10 billion, to a total of approximately $65 billion.
The acquisition is immediately accretive to Ingersoll Rand’s growth and margin rates. ILC’s revenue is expected to reach $400 million in 2024E. This acquisition is subject to customary regulatory approvals and is expected to close in the second quarter of 2024.
Ingersoll held $1.6 billion in cash and equivalents as of December 31, 2023.
Price Action: IR shares closed lower by 0.38% at $94.74 on Friday.
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