Flowserve Corporation FLS announced a definitive agreement to acquire Houston-based MOGAS Industries, a provider of severe service valves, for $290 million with a potential $15 million earnout.
Founded in 1973 by V. Louis Mogas, MOGAS is a manufacturer of severe service isolation valves for industries like mining and power, with a global presence that complements Flowserve’s markets.
MOGAS’ specialized valve products will enhance Flowserve’s installed base and aftermarket opportunities. After the acquisition, MOGAS will integrate into Flowserve’s Flow Control Division, strengthening its valve portfolio and benefiting customers, particularly in the mining industry.
MOGAS expects to contribute revenues of approximately $200 million with adjusted EBITDA margins in the high teens. The transaction is expected to be accretive to Flowserve’s adjusted EPS in the first full year.
Flowserve anticipates at least $15 million in cost synergies within two years and increased aftermarket potential and revenue growth opportunities. The transaction is expected to close in the fourth quarter of 2024.
Flowserve expects to finance the upfront cash consideration through cash and available debt financing. As of June end, it held cash and equivalents of $515.08 million.
Price Action: FLS shares are trading higher by 1.15% at $45.77 at the last check Tuesday.
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