Flowserve Corporation, a provider of flow control products and services, announced that it has entered into a definitive agreement to acquire Velan, a manufacturer of highly engineered industrial valves, in an all-cash transaction valued at approximately $245 million.
Upon completion of the transaction, Velan will become part of Flowserve’s Flow Control Division (FCD) segment.T he transaction is expected to close by the end of the second quarter of 2023.
Velan is a family-controlled business, with a team of 1,650 people and manufacturing facilities in nine countries. Through its fiscal third quarter ended November 30, 2022, Velan reported trailing twelve-month revenues of approximately $380 million with reported EBITDA of approximately $21 million.
“We are excited about the opportunity to add Velan and its talented team to the Flowserve family,” said Scott Rowe, Flowserve’s President and Chief Executive Officer. “With its strong positioning in the nuclear, cryogenic, industrial and defense markets and highly complementary product portfolio, the addition of Velan furthers our Diversification, Decarbonization and Digitization (3D) strategy. The Transaction also meets our disciplined financial criteria, bringing meaningful aftermarket revenue and synergy opportunities.”
Velan adds significant value within Flowserve’s existing valves portfolio and further builds upon Flowserve’s existing assets through the addition of Velan’s brands, heritage and technical expertise in diverse end markets. The additional scale, footprint consolidation and procurement opportunities provided by the combination is expected to result in substantial synergies. Further, the transaction is expected to increase Flowserve’s aftermarket potential, based on the large installed base of Velan products and the expansive network of Flowserve’s Quick Response Centers (QRCs.)
The acquisition includes the purchase of all of the issued and outstanding Velan equity for approximately $209 million and the assumption of approximately $36.3 million in outstanding gross debt.
