- Attractive upfront purchase multiple of approximately 17x 2024E
Adjusted EBITDA, supported by Adjusted EBITDA margins in the
mid-30s and a three-year historical organic revenue CAGR in the
mid-teens, which are both immediately accretive to the Precision
and Science Technologies (P&ST) segment.
- Adds new technologies for life science applications including
innovative powder and liquid single-use solutions for biopharma and
pharma, and niche solutions for the design and production of
silicone, thermoplastic, and specialty rubber components for
medical devices, with approximately 75% of revenue from consumable,
like-for-like replacement or recurring revenue streams.
- Expands Ingersoll Rand's addressable market by more than $10
billion, to a total of approximately $65 billion, in highly
fragmented market segments with significant and sustainable growth
tailwinds.
- Increases access for existing Ingersoll Rand life science
solutions through established direct channel and strong customer
connectivity in biopharma, pharma, cell and gene therapy, and
related life science end markets, supported by iconic, premium life
sciences brands.
Ingersoll Rand Inc. (NYSE:IR), a global provider of
mission-critical flow creation and industrial solutions, has
entered into an agreement to acquire ILC Dover (“ILC”) from New
Mountain Capital, LLC, a leading growth-oriented investment firm
with approximately $50 billion in assets under management. The deal
includes an upfront cash purchase price of approximately $2.325
billion and an earnout tied to the achievement of select operating
efficiency metrics in 2024. At its maximum payout, the earnout
increases the 17x upfront purchase multiple by less than one
turn.
ILC is a world-leader in the design and production of highly
innovative solutions for biopharmaceutical, pharmaceutical, and
medical device markets as well as a leading supplier for the space
industry. ILC has a 75-year heritage of innovation and commitment
to expanding its product portfolio of mission-critical
applications. ILC serves its global customer base across 11
engineering and production facilities located in North America,
Europe, and Asia, with more than 2,000 team members.
In connection with this acquisition, Ingersoll Rand will
establish a life sciences platform within its P&ST segment,
consisting of ILC plus Ingersoll Rand’s life science-focused brands
including Thomas, Welch, Zinsser Analytic, Tricontinent, Air
Dimensions, and ILS. Corey Walker, ILC President and CEO, will lead
the life sciences platform and join the Ingersoll Rand leadership
team, reporting to Vicente Reynal, chairman and chief executive
officer. This platform will have approximately $700 million in
revenue and will enable Ingersoll Rand to further focus its growth
and investment in life sciences, a key strategic area for the
company. Current P&ST segment leader Santiago Arias Duval will
continue to report to Reynal and lead a second platform within
P&ST consisting of the remaining P&ST businesses, which
represent approximately $1 billion in revenue.
“This acquisition is the next phase of our long-term vision to
expand into higher-growth end markets like life sciences. I am
incredibly excited to partner with Corey and the outstanding team
at ILC, whom we’ve admired for their innovative products and
decades of experience in life sciences, to enhance our presence in
key workflows and applications,” said Vicente Reynal, Ingersoll
Rand chairman and CEO. “We see many opportunities to leverage ILC’s
established market positions and brands, including the ability to
attach Ingersoll Rand’s existing liquid handling technologies and
positive displacement pumps to ILC’s single-use solutions in key
biopharma and pharma production processes. Through ILC, we will get
access to approximately 1,000 customers in the broader life science
and healthcare sectors, where we can leverage our demand generation
capabilities to drive incremental growth in other Ingersoll Rand
product lines like compressors. Working together, we will continue
to drive sustained growth, lead customer value and innovation, and
maximize value creation.”
“I am very proud of our team’s passion for innovation,
commitment to world-class quality, and overall dedication to our
customers during a period of rapid growth,” said Corey Walker, ILC
president and CEO. “I’m excited to combine the Ingersoll Rand and
ILC Life Science portfolio of products that allow us to serve our
customers from the discovery phase in the laboratory to the
commercial production of life saving therapies. ILC Dover’s direct
channel access coupled with Ingersoll Rand’s proven growth and
efficiency tools will allow us to accelerate our ability to serve
customers across their workflows.”
“Since we acquired ILC in early 2020, we have made substantial
investments to support and drive growth. ILC significantly
increased its manufacturing capabilities and cleanroom capacity
while also driving meaningful operational initiatives to better
serve its customers,” said Andre Moura, managing director at New
Mountain Capital. “We would like to thank Corey Walker and his
management team for the successful partnership. Under Corey’s
leadership, the business materially expanded its product set,
including its portfolio of flexible, single-use solutions for
sterile and aseptic manufacturing processes. We see a strong fit
between Ingersoll Rand and ILC, and we are confident that Ingersoll
Rand is the right partner for its next stage of growth.”
This acquisition is immediately accretive to Ingersoll Rand’s
growth and margin rates. ILC’s revenue has grown at a mid-teens
CAGR organically over the last three years and is expected to reach
almost $400 million in revenue in 2024E, with mid-30s Adjusted
EBITDA margins. Through the deployment of Ingersoll Rand Execution
Excellence (IRX) and organic growth enablers like Demand Generation
Excellence (DGX), Ingersoll Rand expects to achieve a ROIC in the
high single digits by year three of its ownership. This acquisition
is subject to customary regulatory approvals and is expected to
close in Q2 2024.
Investor Conference Call and Presentation
Ingersoll Rand will host a live investor conference call to
discuss this announcement on Monday, March 25, 2024, at 10:00 a.m.
Eastern Daylight Time. To participate in the call, please dial
(800) 715-9871, domestically, or +1 (646) 307-1963,
internationally, and use access code 4101345.
A real-time audio webcast can be accessed via the Events and
Presentations section of the Ingersoll Rand Investor Relations
website, in addition to a replay shortly after completion.
Conference call slides will be posted in advance of the call.
Advisors
Kirkland & Ellis LLP is serving as legal counsel to
Ingersoll Rand. Jefferies LLC and Goldman Sachs & Co. LLC are
serving as financial advisors and Simpson Thacher & Bartlett
LLP is serving as legal counsel to ILC Dover and New Mountain
Capital.
About Ingersoll Rand Inc.
Ingersoll Rand Inc. (NYSE:IR), driven by an entrepreneurial
spirit and ownership mindset, is dedicated to Making Life Better
for our employees, customers, shareholders, and planet. Customers
lean on us for exceptional performance and durability in
mission-critical flow creation and industrial solutions. Supported
by over 80+ respected brands, our products and services excel in
the most complex and harsh conditions. Our employees develop
customers for life through their daily commitment to expertise,
productivity, and efficiency. For more information, visit
www.IRCO.com.
About New Mountain Capital
New Mountain Capital is a New York-based investment firm that
emphasizes business building and growth, rather than debt, as it
pursues long-term capital appreciation. The firm currently manages
private equity, credit and net lease investment strategies with
approximately $50 billion in assets under management. New Mountain
seeks out what it believes to be the highest quality growth leaders
in carefully selected industry sectors and then works intensively
with management to build the value of these companies. For more
information on New Mountain Capital, please visit
https://www.newmountaincapital.com/.
Forward-Looking Statements
These forward-looking statements are based on Ingersoll Rand’s
current expectations and are subject to risks and uncertainties,
which may cause actual results to differ materially from these
current expectations. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those indicated
or anticipated by such forward-looking statements. The inclusion of
such statements should not be regarded as a representation that
such plans, estimates or expectations will be achieved. Important
factors that could cause actual results to differ materially from
such plans, estimates or expectations include, among others, (1)
adverse impact on our operations and financial performance due to
natural disaster, catastrophe, global pandemics, geopolitical
tensions, cyber events, or other events outside of our control; (2)
unexpected costs, charges or expenses resulting from completed and
proposed business combinations, including the proposed acquisition
of ILC; (3) uncertainty of the expected financial performance of
the Company; (4) failure to realize the anticipated benefits of
completed and proposed business combinations, including from the
proposed acquisition of ILC; (5) the ability of the Company to
implement its business strategy; (6) difficulties and delays in
achieving revenue and cost synergies from the proposed acquisition
of ILC; (7) inability of the Company to retain and hire key
personnel; (8) evolving legal, regulatory and tax regimes; (9)
changes in general economic and/or industry specific conditions;
(10) actions by third parties, including government agencies; (11)
uncertainties as to if or when the conditions to closing the
proposed acquisition of ILC will be satisfied; (12) potential
business uncertainty as a result of changes to existing business
relationships that could affect Ingersoll Rand’s or ILC’s financial
performance and operating results; and (13) other risk factors
detailed in Ingersoll Rand’s most recent Annual Report on Form 10-K
filed with the Securities and Exchange Commission (the “SEC”), as
such factors may be updated from time to time in its periodic
filings with the SEC, which are available on the SEC’s website at
http://www.sec.gov. The foregoing list of important factors is not
exclusive.
Any forward-looking statements speak only as of the date of this
release. Ingersoll Rand undertakes no obligation to update any
forward-looking statements, whether as a result of new information
or developments, future events or otherwise, except as required by
law. Readers are cautioned not to place undue reliance on any of
these forward-looking statements.
Non-GAAP Financial Measures
Included in this press release are certain non-GAAP financial
measures designed to supplement, and not substitute, the financial
information provided in accordance with generally accepted
accounting principles (“GAAP”) in the United States of America
because management believes such measures are useful to investors.
Reconciliations of non-GAAP measures related to 2024 guidance have
not been provided due to the unreasonable efforts it would take to
provide such reconciliations due to the high variability,
complexity and uncertainty with respect to forecasting and
quantifying certain amounts that are necessary for such
reconciliations, including net income (loss) and adjustments that
could be made for acquisitions-related expenses, restructuring and
other business transformation costs, gains or losses on foreign
currency exchange and the timing and magnitude of other amounts in
the reconciliation of historic numbers. For the same reasons, we
are unable to address the probable significance of the unavailable
information, which could have a potentially unpredictable, and
potentially significant, impact on our future GAAP financial
results.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240324336524/en/
Investor Relations: Matthew.Fort@irco.com
Media: Sara.Hassell@irco.com
New Mountain Capital Media Contact:
Dana Gorman H/Advisors Abernathy dana.gorman@h-advisors.global
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