Lone Star Takes SPX FLOW Private

Lone Star Takes SPX FLOW Private

SPX FLOW's TTM EBITDA is just above $200 million which yields an EBITDA valuation multiple of just over 18.3x

SPX FLOW's products include mixers, pumps, air dryers, valves, separators, and heat exchangers


Lone Star Funds has agreed to acquire publicly traded SPX FLOW in an all-cash transaction with an enterprise value of $3.8 billion.

SPX FLOW (NYSE: FLOW) is a maker of machinery and equipment that is used for mixing and blending, fluid handling, separation, and thermal heat transfer in the food, beverage, and industrial sectors. The company’s branded products – sold under a wide array of brand names such as APV, Gerstenberg Schroeder, Seital, Airpel, Deltech, and Johnson Pump – include mixers, pumps, air dryers, valves, separators, and heat exchangers.

SPX FLOW’s products are sold through distributors and independent representatives in the United States, China, Germany, Denmark, France, and other countries. The company, led by CEO Marc Michael and headquartered in Charlotte, North Carolina, was formed in 2015 when SPX (formerly Sealed Power Corporation) separated into two public companies – SPX and SPX FLOW.

“SPX FLOW has transformed its business and made important progress executing against our strategic plans, and we believe this transaction with Lone Star is an exciting culmination of those efforts for our shareholders,” said Mr. Michael.

For the trailing twelve months, ending October 2021, SPX FLOW had revenues of $1.5 billion and EBITDA of $207 million. With an enterprise value of $3.8 billion, this equates to an EBITDA valuation multiple of just over 18.3x.

“We are excited about the opportunity to partner with SPX FLOW,” said Donald Quintin, the president of Lone Star. “This acquisition is consistent with Lone Star’s strategy to invest in businesses with substantial runway for growth. We have great respect for SPX FLOW’s talented employees and their commitment to innovation and serving customers. We look forward to working with Marc and the entire team to help advance SPX FLOW’s strategy and capture the opportunities ahead.”

Dallas-headquartered Lone Star invests in private equity, credit, real estate, and other financial assets. Since raising its first fund in 1995, Lone Star has organized 21 private equity funds with aggregate capital commitments totaling over $85 billion.

Morgan Stanley is the financial advisor to SPX FLOW and Citi, RBC Capital Markets, and BofA Securities are the financial advisors to Lone Star.

This transaction is expected to close during the first half of 2022.

© 2021 Private Equity Professional | December 14, 2021

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