ESAB Corporation Acquires Ohio Medical

Rhea-AI Summary

ESAB Corporation (NYSE: ESAB) has acquired Ohio Medical, a leader in oxygen regulators and central gas systems, for $127 million. This acquisition is expected to enhance ESAB's market presence in North America, increase revenues to over $400 million, and be accretive to adjusted EPS in the first year. Ohio Medical generated over $45 million in sales with gross margins exceeding 40% in the past year. The deal is financed using cash on hand, maintaining a net leverage ratio below 3x at year-end 2022. Details will be shared during the earnings call on November 3, 2022.

Positive

• Acquisition expected to be accretive to adjusted EPS in the first year.
• Ohio Medical generated over $45 million in sales with gross margins above 40%.
• Combined revenues of over $400 million enhance ESAB's market position.
• Increased global cross-selling opportunities post-acquisition.

Negative

• None.

NORTH BETHESDA, Md.--(BUSINESS WIRE)-- ESAB Corporation (“ESAB” or the “Company”) (NYSE: ESAB), a world leader in fabrication and gas control technology, announced today that it has acquired Ohio Medical, LLC (“Ohio Medical”), a global leader in oxygen regulators and central gas systems, from a private investor group for a cash purchase price of $127 million. The Company also expects an additional cash tax benefit with a net present value of $15 million. During the twelve months ended August 31, 2022, Ohio Medical generated over $45 million of sales, gross margins above 40%, and adjusted EBITDA margins greater than 20%. The acquisition is expected to be adjusted EPS accretive to ESAB in the first year. The Company financed the acquisition using cash on hand and expects its net leverage ratio to be less than 3x at the end of 2022. ESAB will provide additional information during its earnings call on Thursday, November 3, 2022.

Shyam P. Kambeyanda, President and Chief Executive Officer of ESAB, stated, “We are thrilled to welcome the Ohio Medical team to ESAB Corporation. Ohio Medical increases our served market in North America for medical oxygen regulators and central gas systems, complementing our GCE and Victor businesses, creating a gas control equipment leader with revenues of more than $400 million. We are excited about the significant global cross-selling opportunities and how Ohio Medical advances our strategy to drive faster growth, higher margins, lower cyclicality, and stronger cash flow.”

Anthony Wieczorek, Chief Executive Officer of Ohio Medical, stated, “For more than 100 years, we have been a market leader in oxygen regulators and central gas systems. Joining ESAB will help us accelerate our expansion globally, while allowing us to harness the power of the ESAB Business System (EBX) to better serve our customers with increased efficiency and innovative customer solutions.”

Ohio Medical is headquartered in Gurnee, Illinois and employs approximately 100 associates, providing ESAB with strong brands and distribution in the large and attractive North American market. Combined with ESAB’s Victor and GCE businesses, the addition of Ohio Medical creates an unmatched global medical and industrial gas control portfolio that enhances the company’s worldwide offerings.

PricewaterhouseCoopers Corporate Finance LLC served as financial adviser and Tucker Ellis LLP served as legal counsel to the Company.

About ESAB Corporation

ESAB Corporation (NYSE: ESAB) is a world leader in fabrication and gas control technology, providing our partners with advanced equipment, consumables, gas control equipment, robotics, and digital solutions which enable the everyday and extraordinary work that shapes our world. To learn more, visit www.ESABcorporation.com.

Cautionary Note Concerning Forward Looking Statements

This press release includes forward-looking statements, including forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning the Company’s plans, goals, objectives, outlook, expectations, and intentions, and other statements that are not historical or current fact. Forward-looking statements are based on the Company’s current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221017005323/en/

Investor Relations:

Mark Barbalato

Vice President, Investor Relations

E-mail: investorrelations@esab.com

Phone: 1-301-323-9098

Media:

Tilea Coleman

Vice President, Corporate Communications

E-mail: mediarelations@esab.com

Phone: 1-301-323-9092

Source: ESAB Corporation

FAQ

What is the purpose of ESAB's acquisition of Ohio Medical?

The acquisition aims to increase ESAB's market presence in North America and enhance revenue opportunities.

How much did ESAB pay for Ohio Medical?

ESAB acquired Ohio Medical for a cash purchase price of $127 million.

What financial benefits does ESAB expect from the acquisition?

ESAB expects the acquisition to be accretive to adjusted EPS in the first year and a cash tax benefit with a net present value of $15 million.

When will ESAB provide more details about the acquisition?

ESAB will discuss further details during its earnings call on November 3, 2022.

What are the financial metrics of Ohio Medical prior to the acquisition?

Ohio Medical reported over $45 million in sales, gross margins above 40%, and adjusted EBITDA margins greater than 20%.