AMETEK (NYSE:AME) has entered a definitive agreement to acquire the Instrumentation group from Indicor, LLC for $5 billion in cash. This strategic acquisition, expected to close in the second half of the year, is projected to enhance AMETEK’s portfolio, adding approximately $1.1 billion in annual sales from 10 businesses, most of which align with its existing Electronic Instruments Group and Electromechanical Group segments.
The $5 billion consideration reflects about 14 times EBITDA and will be funded through borrowings and new debt issuance. AMETEK anticipates its debt-to-EBITDA ratio to be approximately 2.3 times at closing, with an expected quarterly deleveraging of 0.2 to 0.3 turns. The acquired portfolio boasts a 50% recurring revenue base and has shown historical growth rates between 6% to 7%.
AMETEK estimates annual synergies from the acquisition at 10% to 12% of sales, achievable by year three, by applying its established operational model to the new businesses. The integration aims to enhance growth and profitability, with all 10 business leaders from Indicor set to remain with AMETEK post-acquisition.
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