Nordson Acquires ARAG Group For $1B In Cash, Debt

Nordson Corporation NDSN has agreed to acquire ARAG Group and its subsidiaries in an all-cash transaction for €960 million (US$1 billion).

ARAG is a global market and innovation leader in the research, production, and supply of precision control systems and smart fluid components for agricultural spraying, with headquarters in Rubiera, Italy. 

Its portfolio comprises three key product families: fluid components, smart components, and control systems. ARAG supports its customers through seven manufacturing and distribution facilities worldwide and a sales network spanning more than 80 countries.

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ARAG is expected to generate €155 million in sales in FY23. The transaction reflects a valuation of ~16.5 times ARAG's projected FY23 EBITDA. It will operate as a division in Nordson's Industrial Precision Solutions segment.

Jeffrey Pembroke, Nordson executive vice president, said the transaction is "another step forward" in the company's so-called "Ascend Strategy," and that ARAG's technology generates "Nordson-like gross margins."

"Well established and known in Europe and South America, we will be able to leverage Nordson's strong brand and commercial infrastructure to expand ARAG's limited presence in the North American market," Pembroke added.

Nordson held cash and cash equivalents of $129.07 million as of April 30, 2023.

The transaction is expected to close in Nordson's fourth quarter, funded through cash on hand and financial debt.

Price Action: NDSN shares closed at $235.74 on Friday.