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Parker-Hannifin completes Exotic Metals acquisition

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Parker-Hannifin completes Exotic Metals acquisition

Motion and control technologies manufacturer Parker-Hannifin Corp. completed its previously announced acquisition of Exotic Metals Forming Co. LLC for about $1.73 billion in cash from a consortium of sellers.

The net transaction value after adjusting for roughly $170 million of expected tax benefits is about $1.56 billion, according to S&P Global Market Intelligence data.

Exotic will operate as an independent division under Parker-Hannifin's aerospace group to help expand its aerospace products and solutions, with former Exotic president and CEO Bill Binder heading the division.

Parker-Hannifin expects the transaction to be accretive to organic growth, EPS, EBITDA margins and cash flow, excluding one-time costs.

Parker-Hannifin was hit with two credit ratings actions after it initially announced the agreement to acquire Exotic.

S&P Global Ratings had downgraded Parker-Hannifin's issuer credit ratings with a negative outlook, citing the additional debt that Parker-Hannifin was due to take on to fund the Exotic deal and other recent major acquisitions.

Meanwhile, Fitch Ratings had placed Parker-Hannifin's A- long-term issuer default rating on Rating Watch Negative as it also cited the expected increase in the company's financial leverage as a result of its recent acquisitions.

Barclays Bank PLC served as financial adviser to Parker-Hannifin in connection with the transaction, while Jones Day served as legal counsel. Lazard Frères & Co. LLC acted as financial adviser to Exotic, and Perkins Coie LLP offered legal counsel.

Kent, Wash.-based Exotic manufactures hard-metal fabrications for the aerospace and defense industry.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.