Parker Hannifin to acquire filtration firm Clarcor for $4.3bn
Motion and control systems manufacturer Parker Hannifin has agreed to acquire liquid and air filtration systems maker Clarcor for $4.3 billion (€4bn) with company debt included.
In its biggest acquisition deal ever, Parker’s offer of $83 per share represents a premium of approximately 18% over Carcor’s closing price last Wednesday.
According to a statement by Parker, the acquisition significantly extends its range of industrial air and liquid filtration products.
Clarcor’s strong presence in the US and high percentage of recurring after-market sales would benefit Parker Hannifin, the company’s CEO Tom Williams said in the statement.
According to Bloomberg Markets, the acquisition is expected to add to Parker’s earnings in the first year after discounting one-time costs related to the acquisition.
“This deal looks to be strategically sound, well timed, and financially attractive once fully integrated,” Buckingham Research Group analyst Joshua Pokrzywinski told Bloomberg.
“I believe the potential to take advantage of Clarcor’s aftermarket presence in Parker’s distribution network is likely still underappreciated.”
But US securities litigation and shareholder rights law firm Robbins Arroyo has started an investigation on whether the acquisition represents the shareholders.
According to the law firm, the premium Parker has offered is “significantly below” the average one month premium of nearly 42.17% for comparable transactions within the past five years.
Additionally, Robbins Arroyo said in a statement that Clarcor reported strong earnings results for its third quarter 2016, with diluted earnings per share of $0.73 for the three months ended 27 August, 2016, a 10.61% increase from the same period of the prior year.