NORTHBROOK, Ill. – IDEX Corporation (NYSE: NYSE:IEX) today announced its definitive agreement to acquire Mott Corporation for a cash consideration of $1 billion, subject to customary adjustments. The transaction, expected to close by the end of the third quarter of 2024, is anticipated to be accretive to IDEX's adjusted earnings per share in fiscal year 2026.
Mott, a leader in the design and manufacturing of sintered porous material structures and flow control solutions, brings over 60 years of co-innovation with major technical brands and OEMs in sectors such as semiconductor, energy, water, and space.
The acquisition is poised to expand IDEX's capabilities in high-value end markets, enhancing its presence in semiconductor wafer fab equipment, energy transition, medical technologies, space & defense, and water purification industries. This move complements IDEX's recent integrations of the Muon Group, Iridian Spectral Technologies, and STC Material Solutions, and is expected to generate significant strategic and financial benefits.
Eric D. Ashleman, CEO and President of IDEX, stated that Mott's business aligns with IDEX's focus on highly engineered, configurable mission-critical components. He emphasized the expected material benefits from the implementation of 80/20 and the IDEX Operating Model in driving profitable growth.
Mott is projected to generate revenue of approximately $200 million in 2024, with an EBITDA margin in the low 20s. It will become part of IDEX's Health & Science Technologies segment. The transaction will be funded through cash on hand, borrowings from IDEX's credit facility, and potential debt issuance.
Boris Levin, President and CEO of Mott, expressed enthusiasm about joining IDEX, highlighting the synergy and cultural alignment between the two companies.
IDEX, a global company with approximately $3.3 billion in annual sales, is known for engineering products and mission-critical components across various industries. The firm's products range from microchips and water treatment to healthcare and fire and rescue tools.
This financial news is based on a press release statement from IDEX Corporation.
In other recent news, IDEX Corporation has demonstrated a strong financial performance in the Q1 2024. The company reported an increase in sequential orders, particularly in its core industrial and municipal markets. This robust performance was met with positive responses from TD Cowen and Baird, two major financial firms. TD Cowen maintained its Buy rating on IDEX, emphasizing the company's capacity to meet its financial objectives despite certain industry headwinds. Meanwhile, Baird adjusted its price target for IDEX but continues to recommend the stock as an Outperform, indicating a positive long-term view.
The company's commitment to shareholder value is evident in its consistent dividend payments. IDEX declared a quarterly cash dividend of $0.69 per common share, marking its 119th consecutive quarterly distribution to shareholders. This commitment reflects the company's stable financial position and confidence in its business operations.
These recent developments highlight IDEX Corporation's strong financial performance and positive outlook. The company's focus on growth initiatives and integration of recent acquisitions, coupled with its consistent dividend payments, positions it favorably for future success.
InvestingPro Insights
In the wake of IDEX Corporation's (NYSE: IEX) announcement to acquire Mott Corporation, the company's financial health and market performance provide additional context to the potential success of this strategic move. IDEX, with a solid market capitalization of $15.53 billion, reflects a substantial presence in its respective sectors. Notably, the company's commitment to shareholder value is evident through its impressive track record of raising dividends for 14 consecutive years, a testament to its financial stability and investor confidence.
InvestingPro Tips highlight that IDEX operates with a moderate level of debt and has maintained dividend payments for a remarkable 30 consecutive years. These factors underscore the company's prudent financial management and reliable income generation for investors. Furthermore, with liquid assets surpassing short-term obligations, IDEX positions itself as a financially resilient company capable of navigating market fluctuations and investing in growth opportunities such as the Mott Corporation acquisition.
Regarding valuation, IDEX trades at a high revenue valuation multiple and a high Price/Book multiple of 4.29 as of the last twelve months as of Q1 2024. Such metrics may suggest a premium market valuation, which could be indicative of the market's confidence in the company's future prospects, especially when considering the expected accretive impact of the Mott acquisition on its earnings per share in fiscal year 2026.
For readers interested in a deeper dive into IDEX's financial health and future outlook, InvestingPro offers additional tips, including an analysis of the company's profitability and stock price volatility. With a total of 9 InvestingPro Tips available, investors can gain a more comprehensive understanding of IDEX's investment profile. Use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and unlock the full suite of insights and analytics on InvestingPro.
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