KKR to take machinery maker Circor private in $1.6-billion deal

June 5, 2023 7:19 AM EDT

FILE PHOTO: Trading information for KKR & Co is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 23, 2018. REUTERS/Brendan McDermid//File Photo

(Reuters) - KKR & Co Inc said on Monday it will buy industrial machinery maker Circor International Inc in a $1.6-billion deal and take it private, as the private equity firm looks to double down on investments in the flow-control market.

Flow-control products help manage and control liquids and gases using equipment or services such as pumps, valves, compressors and meters.

Circor, which has about 3,100 employees, makes pump and valve systems for sectors including oil and gas, industrial, aerospace and defense.

"KKR will help us expand our presence in the flow-control space," Circor's Chief Executive Officer Tony Najjar said.

KKR said it will pay $49 per share, sending Circor's stock up 49% at $47.20 in premarket trading. The offer represents a premium of nearly 55% to Circor's last close on Friday.

The deal represents an equity value of nearly $1 billion, according to Reuters' calculations.

KKR will benefit from Circor's customer base, which includes commercial airlines and the U.S. Department of Defense.

The Wall Street Journal had first reported on the deal.

Evercore, J.P. Morgan Securities LLC and Ropes & Gray LLP advised Circor, while Citi and Kirkland & Ellis LLP were KKR's advisers.

In March last year, Circor flagged irregularities in financial statements and roped in an independent accounting firm, while also engaging in preliminary discussions with interested parties regarding a potential sale.

(Reporting by Nathan Gomes and Priyamvada C in Bengaluru; Editing by Savio D'Souza, Shinjini Ganguli and Shounak Dasgupta)

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