ITT Corp. (ITT) to Acquire Axtone in ~$118M Deal
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ITT Inc. (NYSE: ITT) announced that it has signed an agreement to acquire Axtone, a leading manufacturer of highly engineered and customized components for railway and other harsh-environment industrial markets.
The acquisition will be highly complementary to ITT’s legacy KONI brand as Axtone produces energy absorption solutions such as springs, buffers and coupler components that are critical safety technologies.
“Expanding our strong positions across the transportation industry – including railway, aerospace and automotive – is key to ITT’s strategy,” said ITT CEO and President Denise Ramos. “The addition of Axtone’s high-quality portfolio and leading technologies will serve to further position our growing Motion Technologies business as a global transportation leader with strong capabilities and reach to provide a premier experience to our customers.”
Motion Technologies President Luca Savi said, “This agreement reflects our strategic commitment to enhancing our global leadership position in railway components. Axtone will complement our current portfolio, expand our global railway presence and grow our position in the profitable aftermarket. It will also provide another opportunity to deploy our Motion Technologies management system to create value through operational excellence. We look forward to the opportunity to bring together two outstanding teams with a shared commitment to innovation, quality and unrivaled performance.”
The transaction represents a cash consideration of approximately $118 million that will be primarily funded from the company’s foreign cash (assumes $1.09 USD per €1 Euro). The final purchase price is subject to a customary net working capital adjustment. The transaction is expected to close in the first quarter of 2017, subject to customary closing conditions, including appropriate regulatory approvals. Axtone anticipates full-year 2016 revenues of approximately $80 million and adjusted EBITDA of approximately $14 million. The transaction is expected to be accretive to ITT earnings in the first full year after closing. Axtone is headquartered in Kańczuga, Poland, and has approximately 660 employees and six manufacturing locations.
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