Ingersoll Rand has entered into an agreement to acquire SPX Flow’s Air Treatment business for approximately $525 million. With expected revenue of approximately $180 million in 2022, the Air Treatment business is a leading manufacturer of reliable and energy-efficient desiccant and refrigerated dryers, filtration systems, and purifiers for dehydration in compressed air. The business has manufacturing capabilities in the U.S., Germany, and South Korea with nearly 500 employees and goes to market through the highly recognized brands of Hankison, Pneumatic Products, Jemaco, Deltech, and Delair.
“We are excited to welcome the SPX Flow Air Treatment team into the Ingersoll Rand family,” said Vicente Reynal, chairman and chief executive officer of Ingersoll Rand. “Our customers lean on us to deliver innovative technologies that drive reliability, efficiency, performance, and excellence. Compressed air dryer and filtration equipment helps increase the production and process reliability of the compressor and continues our strategy of expanding our product offerings in the broader compressor ecosystem. The business is highly complementary and we expect it to be driven by the same sustainability trends that we see as a tailwind for our compressor business.”
“Not only does the acquisition add a highly complementary product portfolio, nearly half of its revenue is from recurring aftermarket offerings – one of our critical strategic acquisition criteria,” said Reynal. “We expect the strong strategic fit to quickly yield adjusted EBITDA margins accretive to the IT&S segment and drive significant synergies that are expected to result in adjusted EBITDA margins greater than 30% by year three.”
“I’d like to thank the team for their dedication in developing a high-quality business and for their commitment to serving customers,” said Marc Michael, president and chief executive officer of SPX FLOW. “Being a part of Ingersoll Rand is an exciting next step for the business.”
The all-cash transaction is expected to close in the fourth quarter upon obtaining the required regulatory approvals. Upon transaction close, the SPX Flow Air Treatment business will join Ingersoll Rand’s IT&S segment.