CLARCOR Agrees to Acquire Air Filtration Business from G.E. Power and Water
05 November 2013 - 1:00PM
Business Wire
CLARCOR Inc. (NYSE: CLC) announced that it has entered
into an agreement to acquire the Air Filtration business of General
Electric Company’s Power and Water division for approximately $265
million, subject to contractually agreed adjustments. With over 700
employees around the world and trailing twelve month annual
revenues of approximately $230 million, the business is a leading
supplier of air filtration systems and filters used in gas turbine
applications, as well as industrial air filtration products and
membranes. Headquartered in Overland Park, Kansas and with
manufacturing operations in Missouri, the UK and China, the
business will continue to supply gas turbine air inlet filtration
systems and filters to GE, which has the world’s largest installed
base of natural gas turbines, under a multi-year supply agreement.
The transaction is expected to close by the end of 2013.
Christopher L. Conway, CLARCOR’s Chairman, President and Chief
Executive Officer commented, “We are very excited about this
acquisition and the multiple opportunities it offers CLARCOR. Each
element of this business – gas turbine filtration, industrial air
filtration, and membranes – is attractive and fits within our core
strategies and competencies. This transaction creates exciting new
vertical opportunities and relationships, affords us access to
various new technologies, broadens our already extensive product
portfolio and solidifies what we believe is our standing as the
most diversified filtration company in the world.
“With this transaction, CLARCOR will become a leading designer
and supplier of air inlet filtration products for natural gas
turbines, a business we believe is poised for long-term growth as
the world continues to shift toward natural gas as its energy
source of choice. CLARCOR traditionally has had little presence in
the gas turbine business, and we believe this transaction will
immediately position CLARCOR as a major player in the space and
provide a strong platform from which to grow, both with respect to
first-fit applications as well as the aftermarket.
“The industrial air filtration piece of the business, better
known as BHA – one of the industry’s most well-known and respected
names – is widely recognized as having a broad offering of products
as well as in-depth customer knowledge and service capabilities.
For decades, BHA has been engaged in direct selling of aftermarket
bag house air filters and pleated cartridges for diverse industries
such as cement production, food and beverage and pharmaceuticals.
This direct sales model should dovetail nicely with our TFS
distribution network and allow us to better service aftermarket
customers and vertical markets around the country with a
significantly expanded product offering of pleated industrial air
filters.
“The related membrane portion of the business not only adds
attractive high-margin products to our existing product offerings,
but further enhances our ability to develop performance filtration
media that have potential application throughout CLARCOR. Indeed,
the entire Air Filtration business comes with an abundance of
patented technologies, and will approximately triple the already
extensive number of patents that CLARCOR and its operating
businesses hold today.
“When all is said and done, however, it is no secret that the
key to any acquisition is the people on both sides and the cultural
fit between organizations. It was clear to us from our first
interaction with the management team and our visits to the
business’ facilities in the U.S. and abroad that both of these
factors are present here. We believe that management has done the
right things to position the business for growth and expansion, and
the workforce and culture seem closely aligned with our own. We
view this acquisition as a platform for growth and one from which
we can provide additional scale to our own industrial and process
air businesses, and we believe that the people who will be joining
us will prove themselves to be assets to CLARCOR for years to
come.”
“The Air Filtration business has strengthened its operations and
improved performance over the past two years to create a
world-class filtration business,” said Victor Abate, President and
CEO, Power Generation Products at GE Power & Water. “In the
Power Generation segment, we are focused on our core gas turbine
technology, and we have made the strategic decision to simplify the
business to better match our core strengths. We are pleased that
the transaction with CLARCOR will allow Air Filtration the
opportunity to grow and thrive in the filtration industry.”
XMS Capital Partners served as exclusive financial advisor and
Bass Berry & Sims PLC served as lead legal advisor to CLARCOR
in connection with the transaction. Consummation of the transaction
is subject to customary conditions, including the expiration or
early termination of the waiting period applicable to the
transaction under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
CLARCOR is based in Franklin, Tennessee, and is a diversified
marketer and manufacturer of mobile, industrial and environmental
filtration products and consumer and industrial packaging products
sold in domestic and international markets. Common shares of the
Company are traded on the New York Stock Exchange under the symbol
CLC.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements made in this press release other than
statements of historical fact, are forward-looking statements.
These forward-looking statements may include, among other things:
statements and assumptions relating to the consummation of the
proposed acquisition; the historical results of operations of the
business to be acquired; statements regarding anticipated order
patterns from customers, including GE, or the anticipated economic
conditions of the industries and markets that we serve; statements
relating to the anticipated effects on results of operations or
financial condition from recent and expected developments or
events; statements relating to the Company’s business and growth
strategies; and any other statements or assumptions that are not
historical facts. The Company believes that its expectations are
based on reasonable assumptions. However, these forward-looking
statements involve known and unknown risks, uncertainties and other
important factors that could cause the Company’s actual results,
performance or achievements, or industry results, to differ
materially from the Company’s expectations of future results,
performance or achievements expressed or implied by these
forward-looking statements. These risks include the failure to
complete the acquisition and the failure to realize the economic
and strategic benefits of the transaction. In addition, the
Company’s past results of operations do not necessarily indicate
its future results. The Company’s future results may differ
materially from the Company’s past results as a result of various
risks and uncertainties, including the risk factors discussed in
the “Risk Factors” section of the Company’s 2012 Form 10-K and
other risk factors detailed from time to time in the Company’s
filings with the Securities and Exchange Commission. You should not
place undue reliance on any forward-looking statements. These
statements speak only as of the date of this press release. Except
as otherwise required by applicable laws, the Company undertakes no
obligation to publicly update or revise any forward-looking
statements or the risk factors described in this press release,
whether as a result of new information, future events, changed
circumstances or any other reason after the date of this press
release.
CLARCOR Inc.David J. Fallon, 615-771-3100Vice President - Chief
Financial Officer
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