IDEX to acquire Mott Corporation for $1 billion
September 3, 2024
IDEX Corporation, Northbrook, Illinois, USA, has announced that it has entered into a definitive agreement to acquire Mott Corporation, headquartered in Farmington, Connecticut, USA, and its subsidiaries for cash consideration of $1 billion, subject to customary adjustments.
When adjusted for the present value of expected tax benefits of approximately $100 million, the net transaction value is approximately $900 million. This represents approximately 19x Mott’s forecasted full-year 2024 EBITDA and a mid-teens multiple based on forecasted 2025 EBITDA. The transaction is expected to be accretive to adjusted earnings per share in fiscal year 2026.
“Mott’s business fits the IDEX sweet spot of highly engineered, configurable mission-critical components focused on scalable select applications. The addition of Mott represents an important step in our evolution, as we continue building our differentiated capabilities in applied materials technologies. Mott brings advanced technical and application expertise that will expand our capabilities in high-value end markets and open new organic growth opportunities. Our focus on driving profitable growth through the enterprise-wide application of 80/20 is expected to yield material benefits,” said Eric D Ashleman, Chief Executive Officer and President of IDEX.
“The addition of Mott supports our strategy to deliver long-term, compounding value to our customers, employees, and shareholders, which includes targeted inorganic growth funded by strong cash flow generation. With shared cultural values, including a deep passion for solving customer challenges through technical capabilities and innovative solutions, our great teams combine to offer meaningful go-to-market opportunities. We look forward to welcoming the over 500 Mott employees to IDEX,” Ashleman continued.
This transaction is expected to deliver significant strategic and financial benefits, including:
- Expanding the applied material science technologies portfolio: The transaction is expected to bring scale to IDEX’s growing suite of focused, high-value businesses – including IDEX Optical Technologies, the Muon Group, and recently acquired Iridian Spectral Technologies and STC Material Solutions – that address customer demand for novel solutions and expertise across advanced materials, microscale features, precision components, and proprietary production processes.
- Extend similar value proposition into new customer relationships: Like IDEX, Mott develops and delivers essential products and solutions that represent a modest cost relative to the scale of the overall systems and processes that they support. Mott’s strong tradition of innovating closely with OEM customers brings additive, long-term customer relationships, enabling efficient integration into the IDEX family.
- Extend capabilities to address unique customer needs: The acquisition is intended to add advanced customisation and system-design capabilities, deepening IDEX’s position as an innovation partner. This allows IDEX to further address customer needs for extremely precise solutions in fluidic applications from the product to system level, including the opportunity to offer tailored, cross-functional products. For example, IDEX expects Mott, IDEX Health & Science, Muon, and its Material Processing Technologies businesses to find additive commercial and technology solutions for medical device, healthcare and biotech customers. Within transitioning energy markets, Mott and IDEX’s pneumatics businesses could bring operational and applications expertise to meet customer needs for more efficiency and lower carbon emissions.
- Enhance positioning across high-value end markets: The transaction is also intended to bolster the ability to grow presence in select, technology-enabled applications with substantial growth potential, including semiconductor wafer fab equipment, the energy transition, medical technologies, space and defence, and water purification.
- Add to long-term growth and margin profile: The acquisition is believed to combine IDEX’s technical and commercial excellence with Mott’s leading-edge innovation, technology, and R&D expertise. This combination is anticipated to yield meaningful commercial growth synergies over the next three years and drive EBITDA expansion through the proven application of 80/20 as part of the IDEX Operating Model.
“We’re excited to join an industry leader with a strong record of helping customers solve their toughest problems. Mott brings applied material science, chemistry, and application expertise, an additive and complementary customer base, and a growing pipeline of opportunities. When combined with the scale of IDEX, industry-leading positions, and deep technological know-how, this will yield meaningful synergies and benefits. Our culture and capabilities align with IDEX, and our employees will add tremendous value to the company, just as they’ve driven Mott’s growth for generations,” stated Boris Levin, President and Chief Executive Officer of Mott.
In 2024, Mott is expected to generate approximately $200 million of revenue, with an EBITDA margin in the low 20s. Mott will join IDEX’s Health & Science Technologies segment. The transaction will be funded through a combination of cash on hand, borrowings from IDEX’s current credit facility, and potential debt issuance. It is expected to close by the end of the third quarter of 2024, subject to regulatory approvals and customary closing conditions.
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