Ingersoll-Rand to acquire ILC Dover for $2.33B, sees accretion

Ingersoll Rand has entered into an agreement to acquire ILC Dover from New Mountain Capital, an investment firm with approximately $50B in assets under management. The deal includes an upfront cash purchase price of approximately $2.33B and an earnout tied to the achievement of select operating efficiency metrics in 2024. At its maximum payout, the earnout increases the 17x upfront purchase multiple by less than one turn. ILC serves its global customer base across 11 engineering and production facilities located in North America, Europe, and Asia, with more than 2,000 team members. In connection with this acquisition, Ingersoll Rand will establish a life sciences platform within its P&ST segment, consisting of ILC plus Ingersoll Rand’s life science-focused brands including Thomas, Welch, Zinsser Analytic, Tricontinent, Air Dimensions, and ILS. Corey Walker, ILC president and CEO, will lead the life sciences platform and join the Ingersoll Rand leadership team, reporting to Vicente Reynal, chairman and chief executive officer. This platform will have approximately $700M in revenue and will enable Ingersoll Rand to further focus its growth and investment in life sciences, a strategic area for the company. Current P&ST segment leader Santiago Arias Duval will continue to report to Reynal and lead a second platform within P&ST consisting of the remaining P&ST businesses, which represent approximately $1B in revenue. This acquisition is immediately accretive to Ingersoll Rand’s growth and margin rates. ILC’s revenue has grown at a mid-teens CAGR organically over the last three years and is expected to reach almost $400M in revenue in 2024E, with mid-30s adjusted EBITDA margins. This acquisition is subject to customary regulatory approvals and is expected to close in Q2.