Flowserve to Acquire MOGAS Industries, Accelerating 3D Growth Strategy - Seite 2

Matt Mogas, President and Chief Executive Officer of MOGAS, commented, “There is no better cultural and strategic fit for our family’s 50-year-old business than joining with Flowserve, a company that shares our unwavering commitment to customers, people, and products. Our employees, who are at the heart of our success, will benefit from the alignment of values and opportunities for growth within a larger organization.”

Transaction Details and Approvals

The Transaction includes an upfront purchase price of $290 million of cash consideration with an additional earnout of up to $15 million tied to the achievement of certain minimum levels of adjusted EBITDA of the MOGAS business for the calendar year ended December 31, 2024. When adjusted for approximately $15 million of expected tax benefits, the upfront purchase price represents a purchase multiple of approximately 7.5x MOGAS’ 2024E adjusted EBITDA.

The Transaction is expected to be accretive to Flowserve’s adjusted EPS in the first full year following closing. MOGAS expects to contribute revenues of approximately $200 million with adjusted EBITDA margins in the high teens.

The additional scale, footprint consolidation and procurement opportunities provided by the combination provide clear visibility to at least $15 million of run-rate cost synergies within two years after closing of the Transaction. Further, the Transaction is expected to increase Flowserve’s aftermarket potential and provide the opportunity for revenue growth synergies as well.

Flowserve expects to fund the upfront cash consideration through a combination of cash and available debt financing. The Transaction is subject to the satisfaction of customary closing conditions and regulatory approvals.

Advisors

Jefferies is serving as financial advisor and Baker McKenzie is serving as legal advisor to Flowserve. Baird is serving as financial advisor and Foley & Lardner is serving as legal advisor to MOGAS.

About Flowserve

Flowserve Corp. is one of the world’s leading providers of fluid motion and control products and services. Operating in more than 50 countries, Flowserve produces engineered and industrial pumps, seals and valves as well as a range of related flow management services. More information about Flowserve can be obtained by visiting Flowserve’s Web site at www.flowserve.com.