- Enhances ability to deliver innovative, customized, and highly
technical micro-precision solutions that are increasingly essential
to customer product performance
- Increases opportunities in semiconductor wafer fab equipment,
energy transition, medical technologies, space & defense, and
water purification industries
- Complements successful integration of the Muon Group, Iridian
Spectral Technologies, and STC Material Solutions, providing unique
process-based capabilities working with specialized materials
- Drives near- and long-term value creation through
implementation of 8020 and the IDEX Operating Model
IDEX Corporation (NYSE: IEX) (“IDEX”) today announced it has
entered into a definitive agreement to acquire Mott Corporation and
its subsidiaries (“Mott”) for cash consideration of $1 billion (the
“transaction”), 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 is a leader in the design and manufacturing of sintered
porous material structures and flow control solutions, with deep
applied material science knowledge and process control
capabilities. For more than 60 years, Mott has solved highly
complex engineering challenges by co-innovating with the world’s
largest technical brands and OEMs in dynamic markets including
semiconductor, energy, water, and space.
“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.”
Transaction Expected to Deliver
Significant Strategic and Financial Benefits
Expands applied material science technologies portfolio:
Brings 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.
Extends 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.
Extends capabilities to address unique customer needs:
Adds advanced customization 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, we expect Mott, IDEX Health & Science,
Muon, and our 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.
Enhances positioning across high-value end markets:
Bolsters ability to grow presence in select, technology-enabled
applications with substantial growth potential, including across
semiconductor wafer fab equipment, the energy transition, medical
technologies, space & defense, and water purification.
Adds to long-term growth and margin profile: Combines the
technical and commercial excellence of IDEX with leading-edge
innovation, technology, and R&D expertise of Mott, which 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.” said 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,
and it is expected to close by the end of the third quarter of
2024, subject to regulatory approvals and customary closing
conditions.
Conference Call
Information
IDEX will host a conference call to discuss the transaction at
9:30 am Central Time (CDT) today. The conference call will be
webcast live from IDEX’s investor relations website at
https://investors.idexcorp.com. The conference call can also be
accessed live over the phone by dialing 1-877-709-8150 or +1
201-689-8354. The conference ID is 13747873. A replay will be
available approximately three hours after the call and can be
accessed by dialing 877-660-6853 or +1 201-612-7415 for
international callers. The replay will be available through August
23, 2024.
About IDEX
IDEX Corporation (NYSE: IEX) designs and builds engineered
products and mission-critical components that make everyday life
better. IDEX precision components help craft the microchip powering
your electronics, treat water so it is safe to drink, and protect
communities and the environment from sewer overflows. Our optics
enable communications across outer space, and our pumps move
challenging fluids that range from hot, to viscous, to caustic.
IDEX components assist healthcare professionals in saving lives as
part of many leading diagnostic machines, including DNA sequencers
that help doctors personalize treatment. And our fire and rescue
tools, including the industry-leading Hurst Jaws of Life®, are
trusted by rescue workers around the world. These are just some of
the thousands of products that help IDEX live its purpose – Trusted
Solutions, Improving Lives™. Founded in 1988 with three small,
entrepreneurial manufacturing companies, IDEX now includes more
than 50 diverse businesses around the world. With about 8,800
employees and manufacturing operations in more than 20 countries,
IDEX is a diversified, high-performing, global company with
approximately $3.3 billion in annual sales.
For further information on IDEX Corporation and its business
units, visit the company’s website at www.idexcorp.com
About Mott
Mott is a leading microfiltration business specializing in the
design, customization, and manufacturing of sintered porous metal
components and engineered solutions used in fluidic applications.
Mott combines design expertise for thousands of applications with
the power of cutting-edge technology to create highly engineered
products. Founded in 1959 in Farmington, CT, Mott is globally known
for its reliability and unmatched dependability, serving the
highest-cost of failure applications. With approximately 500
employees, Mott partners with world-class customers with demanding
technical specifications to design, engineer, produce, and employ
innovative products to solve their most challenging filtration and
flow control problems.
Use of Non-GAAP Financial
Information
IDEX prepares its public financial statements in conformity with
accounting principles generally accepted in the United States of
America (GAAP). IDEX supplements certain GAAP financial performance
metrics with non-GAAP financial performance metrics. Management
believes these non-GAAP financial performance metrics provide
investors with greater insight, transparency and a more
comprehensive understanding of the financial information used by
management in its financial and operational decision-making because
certain of these non-GAAP metrics exclude items not reflective of
ongoing operations. Non-GAAP financial performance metrics should
not be considered a substitute for, nor superior to, the financial
data prepared in accordance with GAAP. EBITDA is calculated as net
income plus interest expense plus provision for income taxes plus
depreciation and amortization. EBITDA margin is calculated as
EBITDA divided by net sales.
IDEX has not provided a reconciliation of Mott’s expected EBITDA
and EBITDA margin for fiscal year 2024 or 2025 because we are
unable to quantify certain amounts that would be required to be
included in Mott’s contribution to net income without unreasonable
efforts. In addition, IDEX believes such reconciliation would imply
a degree of precision that would be confusing or misleading to
investors.
Cautionary Note Regarding
Forward-Looking Statements
This press release contains “forward-looking” statements within
the meaning of the Private Securities Litigation Reform Act of
1995, as amended. Such forward-looking statements include
statements regarding the expected benefits of the acquisition of
Mott, the expected impact of the acquisition on IDEX’s product
offerings or proposed product offerings, IDEX’s combined existing
and new customers and access to high-value end markets, the
enhancement of IDEX’s business strategy, integration plans, the
expected growth opportunities, profitability and synergies
resulting from the acquisition, including the timing of such
expected synergies, the present value of expected tax benefits, the
anticipated long-term value to IDEX’s shareholders, the projected
revenue, EBITDA and EBITDA margin of Mott and the related impact
and timing for such impact on IDEX’s earnings, return on invested
capital, and the expected timing for the closing of the
transaction. These statements are subject to inherent uncertainties
and risks that could cause actual results to differ materially from
those anticipated at the date of this press release. The risks and
uncertainties include, but are not limited to, the following:
levels of industrial activity and economic conditions in the U.S.
and other countries around the world, including uncertainties in
the financial markets; pricing pressures, including inflation and
rising interest rates and other competitive factors and levels of
capital spending in certain industries; the impact of catastrophic
weather events, natural disasters and public health threats;
economic and political consequences resulting from terrorist
attacks and wars; risks relating to the satisfaction of the closing
conditions set forth in the definitive agreement; IDEX’s ability to
integrate Mott and to acquire, integrate and operate other acquired
businesses on a profitable basis; cybersecurity incidents; the
relationship of the U.S. dollar to other currencies and its impact
on pricing and cost competitiveness; political and economic
conditions in foreign countries in which IDEX operates;
developments with respect to trade policy and tariffs; interest
rates; capacity utilization and the effect this has on costs; labor
markets; supply chain conditions; market conditions and material
costs; risks related to environmental, social and corporate
governance issues, including those related to climate change and
sustainability; and developments with respect to contingencies,
such as litigation and environmental matters. Additional factors
that could cause actual results to differ materially from those
reflected in the forward-looking statements include, but are not
limited to, the risks discussed in the “Risk Factors” section
included in IDEX’s most recent annual report on Form 10-K and
IDEX’s subsequent quarterly reports filed with the Securities and
Exchange Commission (“SEC”) and the other risks discussed in IDEX’s
filings with the SEC. The forward-looking statements included here
are only made as of the date of this press release and management
undertakes no obligation to publicly update them to reflect
subsequent events or circumstances, except as may be required by
law. Investors are cautioned not to rely unduly on forward-looking
statements when evaluating the information presented here.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240722904638/en/
Investor Contact: Wendy Palacios Vice President, FP&A
and Investor Relations (847) 457-3723 wpalacios@idexcorp.com
Media Contact: Mark Spencer Vice President, Global
Communications (847) 457-3793 mdspencer@idexcorp.com
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