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Ingersoll Rand expands life sciences portfolio with ILC Dover buy

EditorEmilio Ghigini
Published 03/25/2024, 07:33 AM
© Reuters.

DAVIDSON, N.C. - Ingersoll Rand Inc. (NYSE:IR), a global industrial company, has announced its acquisition of ILC Dover (NYSE:DOV) from New Mountain Capital, LLC for an upfront cash purchase price of approximately $2.325 billion. The transaction is expected to close in the second quarter of 2024, subject to regulatory approvals.

ILC Dover is recognized for its innovative solutions in the biopharmaceutical, pharmaceutical, and medical device markets, as well as being a key supplier for the space industry. The company, which boasts a 75-year history, operates 11 engineering and production facilities across North America, Europe, and Asia, employing over 2,000 team members.

This acquisition will establish a life sciences platform within Ingersoll Rand's Precision and Science Technologies (P&ST) segment, which will include ILC and Ingersoll Rand’s existing life science-focused brands. The platform, led by ILC President and CEO Corey Walker, is projected to generate approximately $700 million in revenue.

Ingersoll Rand's chairman and CEO, Vicente Reynal, expressed enthusiasm for the partnership with ILC, citing opportunities to leverage ILC’s market positions and brands. The acquisition is intended to enhance Ingersoll Rand's presence in life sciences, a strategic growth area for the company.

ILC’s revenue has seen a mid-teens compound annual growth rate (CAGR) organically over the past three years and is expected to reach close to $400 million in revenue in 2024, with mid-30s Adjusted EBITDA margins. Ingersoll Rand anticipates the acquisition to be immediately accretive to its growth and margin rates and expects to achieve a return on invested capital (ROIC) in the high single digits by the third year of ownership.

The deal includes an earnout based on the achievement of certain operating efficiency metrics in 2024, which could modestly increase the upfront purchase multiple of approximately 17x 2024E Adjusted EBITDA. The acquisition is also set to expand Ingersoll Rand's addressable market by over $10 billion, to a total of approximately $65 billion, in highly fragmented market segments with strong growth potential.

Legal counsel for Ingersoll Rand in this transaction is provided by Kirkland & Ellis LLP, while Jefferies LLC and Goldman Sachs & Co (NYSE:GS). LLC are serving as financial advisors to ILC Dover and New Mountain Capital, with Simpson Thacher & Bartlett LLP as legal counsel.

Ingersoll Rand will host an investor conference call regarding the acquisition today at 10:00 a.m. Eastern Daylight Time.

This news is based on a press release statement.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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