Jan. 2 MINNEAPOLIS–(business WIRE)–Graco Inc. (NYSE:GGG) announced today that it has agreed to acquire the stock of Pennsylvania-based High Pressure Equipment (HiP) company for $160 million. The acquisition of HiP is subject to customary regulatory review and Graco expects to complete the transaction in the first quarter of 2015. In addition, Graco announced that it has agreed to acquire the Utah-based White Knight Fluid Handling business. The Company expects this acquisition to close in early January. Graco also closed on two other acquisitions in December 2014. The Company acquired the assets of Ontario, Canada-based GeoBlaster Equipment Sales & Services Inc., and Brazil-based Multimaq-Pistolas e Equipamentos Para Pintura Ltda (Multimaq). Aggregate sales and EBITDA of the four businesses in the most recent twelve month period were approximately $50 million and $17 million, respectively.
“The acquisitions we are announcing today support our strategic growth plans to expand into new markets and geographies, while diversifying our portfolio of precision products for critical applications”
“The acquisitions we are announcing today support our strategic growth plans to expand into new markets and geographies, while diversifying our portfolio of precision products for critical applications,” said Patrick J. McHale, Graco's President and CEO.
The combined cash purchase price to acquire the four businesses is approximately $185 million, with additional consideration to the former owners of White Knight Fluid Handling should the business achieve certain growth targets. The acquisition of HiP includes a favorable tax election that is expected to save Graco approximately $1.5 million per year in cash taxes through 2029.
When combined with the acquisition of Alco Valves, which Graco completed early in the fourth quarter of 2014, but before transaction costs and charges related to inventory step-up, these acquisitions are currently expected to provide approximately 13 to 15 cents of accretion to the Company's earnings per share in 2015.
