Atlas Copco AB and Edwards Group Ltd. this week entered into an agreement for Atlas Copco to acquire Edwards, a global supplier of vacuum and abatement solutions for an amount of up to SEK 10.6 billion (about U.S. $1.6 billion). The company is headquartered in Crawley, United Kingdom, and listed on the NASDAQ stock exchange in New York.
“Edwards is a technology leader with a well-developed structure and solid customer relationships in industries we know well,” said Ronnie Leten, president and CEO at Atlas Copco. “It is a great fit for Atlas Copco. The vacuum solutions market is growing and has similar characteristics to our existing industrial businesses.”
Edwards’ products and services are integral for manufacturing semiconductors and flat-panel displays, and are used within an increasingly diverse range of industrial applications. The vacuum solutions market is estimated to be larger than SEK 40 billion (U.S. $6 billion).
The Edwards acquisition gives Atlas Copco an opportunity to expand into a growing business that serves industries well-known to Atlas Copco. There are several synergies between vacuum and compressed air solutions in sales, service and technology development.
“We recognize the strength Edwards has in its people and products as well as their excellence in technology and innovation. We are excited that this professional company will join our group,” said Leten.
Edwards had 2012 revenues of GBP £595 million (U.S. $931.8 million), of which more than half were in Asia, with an adjusted EBITDA margin of 19.1 percent. The reported operating margin was 10.6 percent, including restructuring costs and amortization of the sellers’ purchase price adjustments, corresponding to about 4 percentage points of revenues.
Atlas Copco will pay up to U.S. $10.50 per share, corresponding to an enterprise value of SEK 10.6 billion, including SEK 2.8 billion of assumed net debt. Edwards’s shareholders will initially receive U.S. $9.25 per share and once the audited 2013 income statement is final, an additional payment of up to U.S. $1.25 per share will be made based on 2013 revenue and EBITDA performance.
The acquisition is an all-cash transaction utilizing Atlas Copco’s existing funds.
The transaction, which will be completed by way of a merger, is subject to customary closing conditions including Edwards’ shareholder approval and antitrust clearance. It has been unanimously approved by the boards of directors of both companies. Further, the board of directors of Edwards unanimously recommends the offer to all Edwards shareholders. The transaction is expected to close in the first quarter of 2014. Edwards’ shareholders representing approximately 84 percent of the current shares outstanding have entered into voting agreements with Atlas Copco to vote in favor of the transaction.
Edwards will be part of Atlas Copco’s new Vacuum Solutions division within the Compressor Technique business area.
Atlas Copco is an industrial group with global positions in compressors, expanders and air treatment systems, construction and mining equipment, power tools and assembly systems. Atlas Copco’s Compressor Technique business area provides industrial compressors, gas and process compressors and expanders, air and gas treatment equipment and air management systems. It has a global service network and offers specialty rental services.
For more information about Edwards, visit www.Edwardsvacuum.com.
