Parker Hannifin Corporation announced that it has entered into a definitive agreement to acquire LORD Corporation
for approximately $3.675 billion 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 has annual sales of approximately $1.1 billion 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 accelerates 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.
“This transaction will meaningfully transform our portfolio. We anticipate a smooth closing of the transaction and integration of our two businesses, and through the adoption of The Win Strategy we believe we can capture significant operational synergies. The combination of Parker and LORD is expected to drive significant value for Parker shareholders and be accretive to organic growth, EBITDA margins, cash flow and EPS, excluding one-time costs and deal related amortization.”
Parker expects to realize approximately $125 million in pre-tax run-rate cost synergies by full-year 2023. The cumulative cost to achieve these synergies is expected to be approximately $80 million. Synergies are expected to come from implementation of Win Strategy initiatives such as supply chain and lean productivity, and SG&A.
Upon closing of the transaction, LORD will be combined with Parker’s Engineered Materials Group.
“We look forward to joining our teams and cultures, each of which places significant focus on safety, engaged people participating in high-performance teams, customer experience, profitable growth and top quartile performance," Williams said. "Our shared values, built over the long histories of both companies, making our two companies an ideal match.”
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.