Ingersoll Rand Closes on ILC Dover and Announces Acquisition of Three Additional Companies
Ingersoll Rand has finalized the acquisition of ILC Dover for $2.325 billion, expanding its market reach to $65 billion. Additionally, the company acquired Complete Air and Power Solutions, Del PD Pumps & Gear Pvt , and Fruitland Manufacturing for $150 million. These acquisitions aim to enhance Ingersoll Rand's portfolio in sustainable markets such as life sciences, food and beverage, medical, and wastewater treatment. The company demonstrates its commitment to achieving mid-teens return on invested capital within three years post-acquisition.
- Ingersoll Rand expands addressable market to $65 billion.
- Acquisition of ILC Dover introduces new technologies for life science applications.
- Ingersoll Rand demonstrates commitment to capital allocation strategy.
- Three additional acquisitions for $150 million enhance portfolio in high-growth, sustainable markets.
- Acquisitions expected to achieve mid-teens return on invested capital within three years.
- Del PD Pumps complements high-margin pumping solutions in multiple industries.
- CAPS acquisition expands product expertise and customer choice in industrial technologies.
- Fruitland Manufacturing acquisition enhances capabilities in low flow applications in the mobile vacuum market.
- High upfront cash purchase price of $2.325 billion for ILC Dover may pose financial strain.
- Combined acquisition cost of $150 million for three companies could increase debt levels.
- Integration of new acquisitions may present operational and managerial challenges.
Insights
The acquisitions by Ingersoll Rand demonstrate a strategic move to expand its market presence in several high-growth and sustainable end markets such as life sciences, food and beverage and wastewater treatment. The upfront cash purchase of
Financial Implications: The company's addressable market has now expanded to approximately
Short-term Impact: The immediate financial burden of these acquisitions could pressure the balance sheet and may affect short-term liquidity. However, the long-term growth prospects and potential for high returns make this a promising move.
Long-term Impact: In the long term, the acquisitions could result in a more diversified product portfolio and reduced dependency on cyclical markets. This strategic diversification is expected to enhance the company’s resilience to market fluctuations.
The expansion into new markets such as biopharma, pharma and cell and gene therapy through the acquisition of ILC Dover is particularly noteworthy. These markets are characterized by high growth rates and fragmented competition, which provide ample opportunities for Ingersoll Rand to gain significant market share. The addition of Complete Air and Power Solutions, Del Pumps and Fruitland Manufacturing further diversifies the company's product offerings and geographical footprint.
Industry Context: The life sciences market is growing due to increased demand for innovative medical solutions and therapies. Similarly, the food and beverage and wastewater treatment sectors are experiencing steady growth driven by regulatory requirements and sustainability trends. Ingersoll Rand’s targeted acquisitions align well with these growth sectors.
Competitive Advantage: By integrating these companies, Ingersoll Rand not only broadens its technological capabilities but also enhances its competitive positioning in key markets. This could potentially lead to stronger pricing power and improved market penetration.
The acquisition of ILC Dover is particularly significant from a technological perspective. ILC's innovative powder and liquid single-use solutions for biopharma and cell and gene therapy applications are cutting-edge technologies. These solutions offer increased efficiency, reduced contamination risk and cost savings, which are highly valued in the highly regulated life sciences industry.
Technological Synergies: The integration of ILC Dover’s technologies with Ingersoll Rand’s existing capabilities can create a powerful combination. This can lead to the development of new products and solutions that further solidify the company’s market position. For instance, the synergies in the medical and life sciences segments could lead to advanced medical devices and systems that meet emerging healthcare needs.
Innovation Potential: The acquisition also positions Ingersoll Rand to be at the forefront of innovation in these high-growth sectors. By leveraging ILC Dover’s expertise, the company can accelerate its R&D efforts and bring new products to market faster.
- Extends portfolio in sustainable end markets, including life sciences, food and beverage, medical, and wastewater treatment
- Demonstrates company’s commitment to capital allocation and achievement of mid-teens return on invested capital (ROIC) three years-post acquisition for three different acquisitions
DAVIDSON, N.C., June 03, 2024 (GLOBE NEWSWIRE) -- Ingersoll Rand Inc. (NYSE: IR), a global provider of mission-critical flow creation and industrial solutions, has closed on the previously announced acquisition of ILC Dover (“ILC”) and has acquired Complete Air and Power Solutions (“CAPS”), Del PD Pumps & Gear Pvt Ltd. (“Del Pumps”), and Fruvac Ltd. (“Fruitland Manufacturing”) for a combined purchase price of approximately
The acquisition of ILC, with an upfront cash purchase price of approximately
“We thank ILC’s leadership and employees for their partnership in creating a global leader across multiple high-growth, life critical markets over the last four years,” said Andre Moura, managing director at New Mountain Capital. “We look forward to seeing the business continue on its impressive trajectory with Ingersoll Rand.”
In addition, three additional acquisitions demonstrate the continued commitment and success of the company’s capital allocation strategy:
Del Pumps, based in India, manufactures rotary, twin, and triple gear pumps for the loading, unloading, transfer, and pressurization of liquids. The acquisition will complement Ingersoll Rand’s portfolio of mission critical, high margin pumping solutions across life science, food and beverage, medical, natural gas, and wastewater treatment industries. Del Pumps will join the newly established Precision Technologies platform within the Precision and Science Technologies segment.
CAPS, based in Australia, has been providing compressed air and power generation services to a strong customer base for over 40 years. The acquisition is expected to expand the CAPS portfolio to include additional Ingersoll Rand products, which will provide greater expertise and choice for customers. The business will join the Industrial Technologies and Services (IT&S) segment.
Fruitland Manufacturing is a leading manufacturer of mobile and truck mounted vacuum pumps, systems, and peripheral parts. Based in Canada, Fruitland will expand Ingersoll Rand’s capabilities to include low flow applications in the mobile vacuum market. Fruitland will join the IT&S segment.
“I remain energized by Ingersoll Rand’s growth trajectory,” said Vicente Reynal, chairman and chief executive officer of Ingersoll Rand. “These acquisitions demonstrate our continued commitment to our inorganic growth strategy and ability to execute on our acquisition pipeline.”
About Ingersoll Rand Inc.
Ingersoll Rand Inc. (NYSE:IR), driven by an entrepreneurial spirit and ownership mindset, is dedicated to Making Life Better for our employees, customers, shareholders, and planet. Customers lean on us for exceptional performance and durability in mission-critical flow creation and industrial solutions. Supported by over 80+ respected brands, our products and services excel in the most complex and harsh conditions. Our employees develop customers for life through their daily commitment to expertise, productivity, and efficiency. For more information, visit www.IRCO.com.
Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to Ingersoll Rand Inc.’s (the “Company” or “Ingersoll Rand”) expectations regarding the performance of its business, its financial results, its liquidity and capital resources and other non-historical statements. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “forecast,” “outlook,” “target,” “endeavor,” “seek,” “predict,” “intend,” “strategy,” “plan,” “may,” “could,” “should,” “will,” “would,” “will be,” “on track to” “will continue,” “will likely result,” “guidance” or the negative thereof or variations thereon or similar terminology generally intended to identify forward-looking statements. All statements other than historical facts are forward-looking statements.
These forward-looking statements are based on Ingersoll Rand’s current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially from these current expectations. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. The inclusion of such statements should not be regarded as a representation that such plans, estimates or expectations will be achieved. Important factors that could cause actual results to differ materially from such plans, estimates or expectations include, among others, (1) adverse impact on our operations and financial performance due to natural disaster, catastrophe, global pandemics (including COVID-19), geopolitical tensions, cyber events or other events outside of our control; (2) unexpected costs, charges or expenses resulting from completed and proposed business combinations; (3) uncertainty of the expected financial performance of the Company; (4) failure to realize the anticipated benefits of completed and proposed business combinations; (5) the ability of the Company to implement its business strategy; (6) difficulties and delays in achieving revenue and cost synergies; (7) inability of the Company to retain and hire key personnel; (8) evolving legal, regulatory and tax regimes; (9) changes in general economic and/or industry specific conditions; (10) actions by third parties, including government agencies; and (11) other risk factors detailed in Ingersoll Rand’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”), as such factors may be updated from time to time in its periodic filings with the SEC, which are available on the SEC’s website at http://www.sec.gov. The foregoing list of important factors is not exclusive.
Any forward-looking statements speak only as of the date of this release. Ingersoll Rand undertakes no obligation to update any forward-looking statements, whether as a result of new information or development, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on any of these forward-looking statements.
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FAQ
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