Motion and control technology manufacturer Parker Hannifin last week announced plans to acquire fellow Tennessee company CLARCOR for about $4.3 billion in cash.
Parker officials said that the deal would combine CLARCOR's mobile, industrial and environmental filtration products — comprising about $1.4 billion in annual sales and some 6,000 employees worldwide — with its own filtration operations.
The company said that the acquisition would achieve roughly $140 million in cost savings three years after closing, as well as strengthen its position in "a growing and resilient business."
Parker also noted that some 80 percent of CLARCOR revenue stems from aftermarket sales, which would make the company less vulnerable to ebbs and flows in business.
“This strategic transaction is consistent with our stated objective to invest in businesses that accelerate Parker towards our goal of top quartile financial performance,” Parker chairman and CEO Tom Williams said in a statement.
Under the agreement, Parker will purchase the outstanding shares of CLARCOR — using a combination of cash and new debt — for $83 per share. The $4.3 billion price tag also includes net debt.
The deal was unanimously approved by each company's board of directors; closing is expected during the first quarter of Parker Hannifin's 2018 fiscal year.
“Joining Parker provides a terrific opportunity to accelerate our mission of making our world cleaner and safer while delivering an immediate and substantial cash premium to our shareholders and bolstering the confidence of our customers,” added CLARCOR president and CEO Chris Conway.
