U.S. and U.K. manufacturers looked to pump up their business on Friday, Nov. 14, through two separate agreements that tapped into Germany's strong industrial tradition.
Dallas-based Flowserve Corp. (FLS) agreed to buy SIHI Group BV, a maker of vacuum and fluid pumps for the chemical industry, for €298 million ($370 million), while Britain's IMI plc unveiled an agreement with an enterprise value of €152.6 million for B&R Holding GmbH, a maker of control valves for steam, gas and fluids.
Flowserve would buy SIHI from TBG Europe NV, an Amstelveen, the Netherlands-based investment vehicle of heirs to the German Thyssen Bornemisza family, a wing of the Thyssen industrial family. The heirs tapped investment bank Robert W. Baird & Co. in July to find a new buyer for SIHI after it received inquiries from strategic and financial investors.
"They figured out that they weren't the best owners for SIHI and they had a couple inbound offers," said Baird's Michael Wolff. "We have seen strategics become really motivated to step up if the asset is a good fit. This is one of the biggest recent pump deals."
SIHI is based in the Netherlands and has more than 1,600 employees around the world. The target expects 2014 revenue of €280 million, resulting in Ebitda of €30 million. The deal has an Ebitda multiple of just under 7 times, according to Flowserve.
The buyer said it can double SIHI's Ebitda by 2017 by cutting overlapping activities.
"We are excited about the acquisition of SIHI, which is consistent with Flowserve's ongoing growth strategy to add complementary assets to our portfolio and then accelerate their growth and leverage our operating platform," said Flowserve President CEO Mark Blinn in a statement.
Meanwhile, Birmingham, England-based IMI's agreement to B&R will give it Mannheim, Germany-based Bopp & Reuther, a maker of flow-measurement gear, which gets 57% of its sales from utilities as well as fossil fuel-related companies. IMI hopes to benefit by merging the target with its Critical Engineering division and selling services to B&R's customer base.
"The strategy for our Critical Engineering division is all about focus and growth and this acquisition provides a meaningful addition to our capabilities. It gives us critical mass in the power sector particularly in the faster growing geographies of China and India," said IMI CEO Mark Selway in a statement.
The target had 2013 sales of €89.3 million with Ebitda of €11.2 million. A spokesman for IMI refused to divulge the sellers, though B&R was bought from German automotive supplier Kuka AG by Karlsruhe, Germany private equity shop Tequity Managementgesellschaft mbH in 2006.
The sale comes just a month after IMI agreed to sell its Sutton Coldfield, England target-shooting ammunition maker Eley Ltd. to LDC (Managers) Ltd., the private equity subsidiary of Lloyds Banking Group plc, for £42 million ($65.6 million).