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KKR acquires industrial giant Circor for $1.6bn

KKR & Co has announced its acquisition of Circor International, an industrial machinery manufacturer, for $1.6 billion.

Henry Kravis, co-chairman and co-CEO of private equity firm KKR, has made a recent push on technology, media and telecommunications investments. (Photo by Shihoko Nakaoka)
Henry Kravis, co-chairman and co-CEO of private equity firm KKR, has made a recent push on technology, media and telecommunications investments. (Photo by Shihoko Nakaoka)

The purchase will take the company private and allow KKR to increase its investments in the flow-control market, which includes products used to manage and control liquids and gases through equipment such as pumps, valves, compressors, and meters.

Circor employs approximately 3,100 people and produces pump and valve systems for sectors including oil and gas, industrial, aerospace, and defense.

Circor’s CEO, Tony Najjar, expressed excitement about the acquisition, stating that KKR will help the company expand its presence in the flow-control market.

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The private equity giant will benefit from Circor’s customer base, which includes commercial airlines and the US Department of Defense.

The acquisition will be made through KKR’s North America Fund XIII.

Under the agreement, KKR will pay $49 per share in cash, which represents a 55% premium to the company’s closing stock price on June 2, 2023.

The deal is expected to close in the fourth quarter of 2023, subject to approval from shareholders and regulatory authorities.

Once the transaction is complete, Circor will become a privately held company wholly owned by KKR’s investment funds and will no longer have its common stock listed on any public market.

The acquisition marks a strategic move by KKR to expand its investments in flow-control technologies and aerospace and defense industry suppliers globally.

KKR has recent experience investing in these sectors, including companies such as Ingersoll Rand, Flow Control Group, Hensoldt, and Novaria Group.

Following the close of the transaction, KKR plans to support Circor in expanding its equity ownership program to allow all employees to participate in the benefits of ownership of the company.

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KKR believes that employee engagement is a key driver in building stronger companies and has awarded billions of dollars of total equity value to over 50,000 non-management employees across nearly 30 companies since 2011.

The Board of Directors of Circor has unanimously approved the transaction and recommends that shareholders vote in favor of the deal.

The Board will have the right to terminate the merger agreement to enter into a superior proposal, subject to the terms and conditions of the merger agreement.

The acquisition is expected to create a positive impact on the flow-control market, and KKR will continue to expand its investments in this sector.

To get in contact with feedback on this article please email us at publishing@krugmaninsights.com

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