Carlisle Companies to Acquire MTL Holdings, a Leader in Edge Metal and Non-Insulated Architectural Wall Systems
- Acquisition of MTL Holdings for $410 million in cash.
- Expected cost synergies of $13 million within the first three years.
- Approximately $0.60 of adjusted EPS added in 2025.
- MTL positioned Carlisle as an industry leader in the $4B architectural metal segment.
- Strong management team and premium portfolio from MTL.
- Acquisition aligns with Vision 2030 strategy of Carlisle Companies Incorporated.
- None.
Insights
The acquisition of MTL by Carlisle Companies Incorporated represents a strategic move that aligns with the company's Vision 2030 strategy, which focuses on becoming a pure-play building products company. The purchase price of $410 million, at 8.7x MTL’s adjusted EBITDA, is within the norms for acquisitions in this sector, indicating a fair valuation based on current market trends. The expected cost synergies of $13 million within the first three years suggest a well-planned integration that could lead to operational efficiencies and enhanced profitability.
The addition of MTL's product offerings, including pre-fabricated edge metal and architectural wall panels, positions Carlisle as a more comprehensive provider in the $4 billion architectural metal segment. This move could potentially increase Carlisle's market share and strengthen its competitive edge. The anticipated accretion to EPS of approximately $0.60 in 2025 indicates a positive financial outlook post-acquisition, which is promising for investors and stakeholders.
From a financial perspective, the acquisition's impact on Carlisle's earnings per share (EPS) is significant. An increase of $0.60 to adjusted EPS is a strong indicator of the acquisition's potential to enhance shareholder value. The transaction is also structured to capitalize on a $43 million tax step-up benefit, demonstrating strategic financial planning that could improve Carlisle's tax efficiency. Investors should note that while the acquisition is expected to close in the second quarter of 2024, the realization of these financial benefits will depend on the successful integration of MTL into Carlisle's operations and the actualization of the projected cost synergies.
It is important to monitor how Carlisle will leverage the Carlisle Operating System across MTL's business to drive growth and create value. The focus on innovation and sustainability commitments as part of the acquisition strategy also reflects an understanding of the evolving industry dynamics and consumer expectations, which could lead to long-term competitive advantages.
The acquisition's emphasis on fulfilling sustainability commitments is noteworthy. As businesses increasingly prioritize sustainable practices, Carlisle's intent to invest in innovation within this space could lead to the development of more environmentally friendly products and solutions. This forward-thinking approach not only aligns with global sustainability trends but also resonates with a growing segment of consumers and investors who value corporate responsibility. The integration of MTL's offerings with Carlisle's existing products could result in a more comprehensive 'roof-to-grass' solution that meets both performance and sustainability criteria, potentially setting a new industry standard.
The strategic pivot towards sustainability could also open up new markets and opportunities for Carlisle, as regulations and building codes continue to evolve in favor of green building practices. This could provide Carlisle with a competitive edge in bidding for projects with sustainability requirements and attract investors who are looking to support companies with strong environmental, social and governance (ESG) profiles.
- Acquisition is consistent with Vision 2030 strategy to acquire superior building envelope products and solutions within Carlisle’s existing core
- MTL’s track record of above market growth for pre-fabricated edge metal driven by the same strong trends seen in Carlisle’s existing core businesses, and an unwavering commitment to the same superior customer focus as found in the Carlisle Experience
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Meaningful cost synergies of
$13 million - A strong management team in place ready to continue MTL’s momentum and help to drive future growth of Carlisle’s architectural metals business
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Establishes Carlisle as an industry leader in the
$4B $0.60
MTL is widely recognized as a best-in-class provider of high-performance, pre-fabricated perimeter edge metal systems and non-insulated architectural metal wall systems for commercial, institutional, and industrial buildings. Its premium portfolio is comprised of a well-balanced assortment of complementary pre-fabricated edge metal products under the flagship brands of Metal-Era and Hickman. MTL’s portfolio includes non-insulated aluminum composite material (ACM) architectural wall panels under the Citadel brand. MTL establishes Carlisle as one of the industry’s most comprehensive providers of architectural metal products, including “roof-to-grass” color coordinated metal building envelope solutions. MTL generated revenue of
Chris Koch, Chair, President and Chief Executive Officer, said, “The acquisition of MTL is consistent with Vision 2030 and our intent to build on our strategic pivot to a pure-play building products company with increased investment in innovation, a continued emphasis on synergistic M&A, attracting and retaining top talent, and fulfilling our sustainability commitments. By acquiring MTL and leveraging the Carlisle Operating System across the business, I am confident that we will create significant value for all our stakeholders. We look forward to welcoming Tony Mallinger and MTL’s talented team to Carlisle.”
The acquisition is expected to generate cost synergies of approximately
The acquisition, which is subject to customary closing conditions, is expected to close in the second quarter of 2024.
Dorsey & Whitney LLP served as legal counsel to Carlisle. William Blair & Company LLC served as exclusive financial advisor and Latham & Watkins LLP served as legal counsel to MTL.
Forward-Looking Statements
This press release contains forward-looking statements, including those with respect to the acquisition of MTL, our ability to achieve expected cost synergies from the acquisition, our ability to realize transaction tax benefits, our ability to integrate MTL after the closing, and the anticipated timing of the closing of the transaction. These statements represent only Carlisle’s current belief regarding future events, many of which, by their nature, are inherently uncertain and outside of Carlisle’s control. Actual results could differ materially from those reflected in this press release for various reasons, including the failure of the parties to meet or waive closing conditions and the failure to receive required regulatory approvals. Carlisle disclaims any obligation to update forward-looking statements except as required by law.
Non-GAAP Measures
This press release also contains references to adjusted EPS and adjusted EBITDA, neither of which are recognized under
About Carlisle Companies Incorporated
Carlisle Companies Incorporated is a leading supplier of innovative building envelope products and solutions for more energy efficient buildings. Through its building products businesses – Carlisle Construction Materials ("CCM") and Carlisle Weatherproofing Technologies ("CWT") – and family of leading brands, Carlisle delivers innovative, labor-reducing and environmentally responsible products and solutions to customers through the Carlisle Experience. Carlisle is committed to generating superior shareholder returns and maintaining a balanced capital deployment approach, including investments in our businesses, strategic acquisitions, share repurchases and continued dividend increases. Leveraging its culture of continuous improvement as embodied in the Carlisle Operating System ("COS"), Carlisle has committed to achieving net-zero greenhouse gas emissions by 2050. Learn more about Carlisle at www.carlisle.com.
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Mehul Patel
Vice President, Investor Relations
Carlisle Companies Incorporated
(310) 592-9668
mpatel@carlisle.com
Source: Carlisle Companies Incorporated
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