Private equity firm KKR & Co Inc is nearing a deal to buy industrial machinery maker Circor International for $1.6 billion, including debt, according to people familiar with the matter.
The deal, which could be announced as soon as this week, would mark the latest in a string of acquisitions by KKR in the industrial sector. In recent years, the firm has bought companies such as United Technologies Corp's aerospace parts unit and Ingersoll Rand's pneumatics division.
Circor, based in Wayne, Pennsylvania, makes valves, pumps and other equipment for the oil and gas, power generation and chemical industries. The company has been struggling in recent years, as the oil and gas industry has been hit by lower prices.
KKR is offering to pay $30 per share for Circor, a 20% premium to its closing price on Friday. The deal would be financed with debt and equity, and would be KKR's largest acquisition since it bought United Technologies' aerospace parts unit for $18.2 billion in 2018.
The deal is expected to close in the second half of this year.
Here are some additional details about the deal:
- KKR is offering to pay $30 per share for Circor, a 20% premium to its closing price on Friday.
- The deal would be financed with debt and equity, and would be KKR's largest acquisition since it bought United Technologies' aerospace parts unit for $18.2 billion in 2018.
- The deal is expected to close in the second half of this year.
The deal is likely to face scrutiny from antitrust regulators, as both KKR and Circor are major players in the industrial machinery market. However, analysts believe that the deal is likely to be approved, as it would not create a dominant player in the market.
The acquisition of Circor by KKR is a sign that private equity firms are still active in the industrial sector, despite the challenges facing the industry. KKR is betting that Circor can be turned around by its private equity expertise and capital.
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