Acquisitions Expand Graco’s Global Footprint and Industries Served
MINNEAPOLIS--(BUSINESS WIRE)--Jan. 2, 2015--
Graco Inc. (NYSE:GGG) announced today that it has agreed to acquire the
stock of Pennsylvania-based High Pressure Equipment (HiP) company for
$160 million. The acquisition of HiP is subject to customary regulatory
review and Graco expects to complete the transaction in the first
quarter of 2015. In addition, Graco announced that it has agreed to
acquire the Utah-based White Knight Fluid Handling business. The Company
expects this acquisition to close in early January. Graco also closed on
two other acquisitions in December 2014. The Company acquired the assets
of Ontario, Canada-based GeoBlaster Equipment Sales & Services Inc., and
Brazil-based Multimaq-Pistolas e Equipamentos Para Pintura Ltda
(Multimaq). Aggregate sales and EBITDA of the four businesses in the
most recent twelve month period were approximately $50 million and $17
million, respectively.
“The acquisitions we are announcing today support our strategic growth
plans to expand into new markets and geographies, while diversifying our
portfolio of precision products for critical applications,” said Patrick
J. McHale, Graco’s President and CEO.
The combined cash purchase price to acquire the four businesses is
approximately $185 million, with additional consideration to the former
owners of White Knight Fluid Handling should the business achieve
certain growth targets. The acquisition of HiP includes a favorable tax
election that is expected to save Graco approximately $1.5 million per
year in cash taxes through 2029.
When combined with the acquisition of Alco Valves, which Graco completed
early in the fourth quarter of 2014, but before transaction costs and
charges related to inventory step-up, these acquisitions are currently
expected to provide approximately 13 to 15 cents of accretion to the
Company’s earnings per share in 2015.
Headquartered in Erie, PA, HiP designs and manufactures valves,
fittings, and other flow control equipment engineered to perform in
ultra-high pressure environments, from 10,000 to 150,000 psi. HiP’s
products are used on high-value assets in numerous industrial
applications, including infrastructure in the Oil & Natural Gas industry
and the growing waterjet cutting and cleaning industry, as well as
industrial research programs for universities and major corporations.
HiP also maintains an engineering and production base in Stoke-on-Trent,
Staffordshire U.K.
Headquartered in Kamas, UT, White Knight Fluid Handling manufacturers
air-operated double-bellows pumps, air-operated double-diaphragm pumps,
and metering pumps. The company’s high purity, metal free pumps are used
to deliver, circulate, reclaim, and transport chemical fluids and
slurries that are used in the production of semiconductors, solar
panels, LED flat panel displays, and various other electronics. White
Knight offers an array of highly engineered, rugged, and durable fluid
management solutions including pumping solutions used in numerous
chemical applications such as dosing, spiking, photoresist, etching,
cleaning, and blending.
Based in Dunnville, Ontario, GeoBlaster manufactures wet abrasive
blasting equipment for coating removal and surface preparation. The
GeoBlaster acquisition augments Graco’s existing protective coating
channel.
Headquartered in Porto Alegre, Brazil, Multimaq manufactures and
distributes finishing products that serve a variety of industries
including metal, wood, and leather. Multimaq is a respected brand in the
Brazilian market.
ABOUT GRACO
Graco Inc. supplies technology and expertise for the management of
fluids and coatings in both industrial and commercial applications. It
designs, manufactures and markets systems and equipment to move,
measure, control, dispense, and spray fluid and powder materials. A
recognized leader in its specialties, Minneapolis-based Graco serves
customers around the world in the manufacturing, processing,
construction, and maintenance industries. For additional information
about Graco Inc., please visit us at www.graco.com
or on Twitter @GracoInc.
Cautionary Statement Regarding Forward-Looking Statements
Graco desires to take advantage of the “safe harbor” provisions
regarding forward-looking statements of the Private Securities
Litigation Reform Act of 1995 and is filing this Cautionary Statement in
order to do so. A forward-looking statement is any statement made in
this release that reflects our current thinking on the announced
acquisitions. All forecasts and projections are forward-looking
statements. Forward-looking statements generally use words such as
“expect,” “foresee,” “anticipate,” “believe,” “project,” “should,”
“estimate,” “will,” and similar expressions, and reflect our Company’s
expectations concerning the future. Forward-looking statements are based
upon currently available information, but various risks and
uncertainties may cause our Company’s actual results to differ
materially from those expressed in these statements. Graco undertakes no
obligation to update these statements in light of new information or
future events.
Future results could differ materially from those expressed, due to the
impact of changes in various factors. These risk factors include, but
are not limited to: whether and when the transactions will close as
expected; whether and when we will realize the expected financial
results and accretive effect of the transactions, how customers,
competitors, suppliers and employees will react to the transactions,
economic changes in the oil & natural gas industry and in global
markets, and whether we successfully integrate the newly-acquired
businesses. Please refer to Item 1A of our Annual Report on Form 10-K
for fiscal year 2013 (and most recent Form 10-Q) for a more
comprehensive discussion of other risk factors that relate generally to
the our business and financial condition. These reports are available on
our website at www.graco.com/ir
and the Securities and Exchange Commission’s website at www.sec.gov.
Shareholders, potential investors and other readers are urged to
consider these factors in evaluating forward-looking statements and are
cautioned not to place undue reliance on such forward-looking statements.
Investors should realize that factors other than those identified above
and in Item 1A might prove important to our future results. It is not
possible for management to identify each and every factor that may have
an impact on our operations in the future as new factors can develop
from time to time.
Source: Graco Inc.
Graco Inc.
James A. Graner, 612-623-6635
or
Media:
Bryce
Hallowell, 612-623-6679
bhallowell@graco.com