Parker-Hannifin (PH) - Get Parker-Hannifin Corporation Report on Monday agreed to buy U.K.-based Meggitt for £6.3 billion ($8.8 billion) in cash in a move that will give the aerospace motion-control systems maker more access to the rebounding global aerospace industry.
Parker-Hannifin said it has agreed to pay Meggitt shareholders 800 pence a share, a 71% premium to Meggitt’s July 30 closing price. At last check, shares of Meggitt were up 56% on the London Stock Exchange.
The deal helps Parker-Hannifin better compete in an aviation sector just coming out of its biggest slump in history, as demand for aircraft returns following the coronavirus pandemic.
It is also the largest deal to date for Parker-Hannifin, which has accelerated its buyout activity under CEO Tom Williams.
“We strongly believe Parker is the right home for Meggitt,” Williams said in the statement. “Together, we can better serve our customers through innovation, accelerated R&D and a complementary portfolio of aerospace and defense technologies.”
The acquisition of Meggitt nearly doubles the size of Parker-Hannifin's aerospace systems segment, the company said in a regulatory statement.
Founded in 1917, Parker-Hannifin has a significant U.K. presence, providing hydraulics, pneumatics to the aerospace, automotive and heavy industry sectors. It is already a defense supplier to the U.K. government.
The motion and control-technology company in July 2019 acquired aircraft exhaust systems maker Exotic Metals Forming in a $1.56 billion all-cash deal. That followed the acquisition of Lord Corp in May 2019 for $3.7 billion, a privately held technology and manufacturing company, for $3.7 billion in cash.
Parker-Hannifin stock was down 0.97% to $309 in premarket trading Monday.