Key Takeaways
Global investment firm KKR will acquire CIRCOR International, Inc. (NYSE: CIR) in an all-cash transaction valued at approximately $1.6 billion. The definitive agreement includes the assumption of debt and the acquisition of all outstanding shares of CIRCOR common stock at a premium.
KKR’s All-Cash Acquisition of CIRCOR
CIRCOR International, Inc. (NYSE: CIR), a world-leading provider of flow control products and services for Industrial and Aerospace & Defense markets, has entered into a definitive agreement to be acquired by investment funds managed by KKR, a leading global investment firm. The all-cash transaction is valued at approximately $1.6 billion and includes the assumption of debt.
Under the agreement, KKR will acquire all outstanding shares of CIRCOR common stock at $49 per share in cash, indicating a 55% premium to the Company’s closing stock price on June 2, 2023.
A Strategic Move for CIRCOR
The Board Chair of CIRCOR, Helmuth Ludwig, has termed the agreement as the culmination of a strategic review process initiated in March 2022. This process, aided by external advisors and the management team, led to dialogues with parties interested in acquiring all or parts of the Company. The Board believes that the transaction will unlock significant incremental value for CIRCOR’s stockholders.
Enhanced Value for CIRCOR’s Stockholders
CIRCOR’s President and CEO, Tony Najjar, asserted that the transaction would provide significant value to stockholders, further bolstering the Company’s strategic priorities. The support and resources of KKR are expected to expand CIRCOR’s presence in the flow control space, enhancing the delivery of high-quality products and services to its customers, including those playing a crucial role in national security.
KKR’s Investment Vision
Josh Weisenbeck, a KKR Partner leading KKR’s Industrials investment team, shared his optimism about CIRCOR’s growth potential and the benefits of working with Tony and his team. KKR’s investment in CIRCOR through its North America Fund XIII aims to build on its experience investing in flow control technologies and aerospace and defense industry suppliers globally.
Following the transaction’s closure, KKR plans to expand CIRCOR’s equity ownership program, offering all employees the chance to participate in the benefits of Company ownership.
Transaction Approvals and Timing
The transaction, unanimously approved by CIRCOR’s Board of Directors, is expected to close in the fourth quarter of 2023. This is contingent on the receipt of approval from the Company’s shareholders, certain required regulatory approvals, and the satisfaction of other customary closing conditions.
Post-transaction, CIRCOR will be a privately held company, wholly owned by KKR’s investment funds, with its common stock delisted from all public markets.
Evercore, J.P. Morgan Securities LLC, and Ropes & Gray LLP are serving as advisors to CIRCOR, while KKR is advised by Citi and Kirkland & Ellis LLP.
CIR Market Response
Shares of CIRCOR International are soaring 51% through afternoon trading on Monday, June 5, 2023. Over the past three months, CIRCOR has seen average daily volume of 128,600 shares. However, volume of 3.92 million shares or dollar volume of around $187.06 million, has already exchanged hands through afternoon trading. On a year-to-date basis, shares of CIR have returned 99.17% as of this writing.
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