Parker Hannifin Corporation (NYSE:PH), the global leader in motion
and control technologies, today completed its acquisition of Exotic
Metals Forming Company LLC for $1.725 billion in cash. Exotic
is a manufacturer of innovative and technically demanding,
high-temperature, high-pressure air and exhaust management
solutions for aircraft and engines. The transaction is
expected to be accretive to Parker’s organic growth, EBITDA margin,
EPS and cash flow, after adjusting for one-time costs, and to
achieve high single-digit ROIC in year five with continued
expansion.
Exotic’s high-temperature engine build-up technologies, engine
exhaust nozzles, complex engine turbine hot section assemblies, and
airframe and engine ducting will complement Parker’s portfolio of
flight control, fuel and inerting, hydraulics, fluid conveyance and
engine technologies.
“We are pleased to welcome the Exotic team to Parker,” said Tom
Williams, Chairman and Chief Executive Officer of Parker.
“The addition of Exotic significantly expands our capabilities and
increases Parker’s offering in the attractive engine segment,
serving high growth programs. This strategic transaction
reinforces our stated objective to invest in attractive margin,
growth businesses, such as aerospace, that accelerate us towards
top-quartile financial performance.”
“The addition of Exotic to the Parker Aerospace Group creates
significant growth opportunities,” said Roger Sherrard, Vice
President and President – Aerospace Group. “Exotic will
operate as a stand-alone division within the group, specializing in
some of the most complex and demanding aircraft applications.
Their unique products and proprietary manufacturing capabilities
will complement Parker Aerospace products and solutions, resulting
in a stronger value proposition for customers.”
An integration team has been formed and a detailed integration
plan is underway, which is expected to facilitate a smooth
transition between Parker and Exotic and allow realization of
synergies between the two organizations. Exotic Metals
Forming will become a stand-alone division and will continue to be
led by Bill Binder, formerly Exotic President and CEO. Binder
added, “The growth opportunities Exotic will have as part of Parker
are substantial. We look to the future with optimism and
excitement as we leverage our combined capabilities to the benefit
of our customers and team members.”
About Parker HannifinParker Hannifin is a
Fortune 250 global leader in motion and control technologies.
For more than 100 years the company has engineered the
success of its customers in a wide range of diversified industrial
and aerospace markets. Parker has increased its annual dividend per
share paid to shareholders for 63 consecutive fiscal years, among
the top five longest-running dividend-increase records in
the S&P 500 index. Learn more
at www.parker.com or @parkerhannifin.
About Exotic Metals Forming Company
Exotic Metals Forming Company specializes in the design and
manufacture of state-of-the-art, high-temperature, high-strength
complex hard-metal fabrications to the aerospace and defense
industry. For more than 50 years, the company has established
itself as a trusted partner to its customers by providing
innovative solutions and world-class delivery, quality and
support. Exotic is a recognized industry leader for
manufacturing performance, technical innovation, and delivering the
right solution for its customers on time, every time.
Cautionary Statement Regarding Forward-Looking
Statements
Forward-looking statements contained in this and other written
and oral reports are made based on known events and circumstances
at the time of release, and as such, are subject in the future to
unforeseen uncertainties and risks. These statements may be
identified from the use of forward-looking terminology such as
“anticipates,” “believes,” “may,” “should,” “could,” “potential,”
“continues,” “plans,” “forecasts,” “estimates,” “projects,”
“predicts,” “would,” “intends,” “anticipates,” “expects,”
“targets,” “is likely,” “will,” or the negative of these terms and
similar expressions, and include all statements regarding future
performance, earnings projections, events or developments. Parker
cautions readers not to place undue reliance on these statements.
It is possible that the future performance and earnings projections
of the company, including its individual segments, may differ
materially from current expectations, depending on economic
conditions within its mobile, industrial and aerospace markets, and
the company's ability to maintain and achieve anticipated benefits
associated with announced realignment activities, strategic
initiatives to improve operating margins, actions taken to combat
the effects of the current economic environment, and growth,
innovation and global diversification initiatives. Additionally,
the actual impact of changes in tax laws in the United States and
foreign jurisdictions and any judicial or regulatory
interpretations thereof on future performance and earnings
projections may impact the company’s tax calculations. A change in
the economic conditions in individual markets may have a
particularly volatile effect on segment performance.
The risks and uncertainties in connection with such
forward-looking statements related to the transaction include, but
are not limited to, economic conditions within the company’s and
Exotic’s key markets, and the ability of the company and Exotic to
maintain and achieve anticipated benefits associated with the
transaction, strategic initiatives to improve operating margins,
and growth, innovation and global diversification initiatives;
business disruptions due to transaction-related uncertainty or
other factors making it more difficult to maintain relationships
with employees, business partners or governmental entities; the
possibility that the expected synergies and value creation from the
transaction will not be realized or will not be realized within the
expected time period; the parties being unable to successfully
implement integration strategies; and significant costs related to
the transaction. Readers should consider these forward-looking
statements in light of and in conjunction with risk factors
discussed in Parker’s Annual Report on Form 10-K for the fiscal
year ended June 30, 2019 filed on August 23, 2019 and other
periodic filings made with the SEC. Parker makes these statements
as of the date of this disclosure and undertakes no obligation to
update them unless otherwise required by law.
###
Contact:
Media –
Aidan Gormley
Director, Global Corporate Communications and Branding
216/896-3258
aidan.gormley@parker.com
Financial Analysts –
Robin J. Davenport
Vice President, Corporate Finance
216/896-2265
rjdavenport@parker.com
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