26 February, 2020

Eaton reaches agreement to sell its Hydraulics business for $3.3 billion

14 February, 2020

Power management company Eaton has entered into an agreement to sell its Hydraulics business to Danish industrial company Danfoss A/S for $3.3 billion in cash. This represents a 13.2 multiple of 2019 EBITDA.


Eaton’s Hydraulics business, which accounted for 86% of Eaton’s Hydraulics segment revenue in 2019, is a global provider of hydraulics components, systems and services for industrial and mobile equipment. The business had sales of $2.2 billion in 2019 and employs approximately 11,000 people. Eaton is retaining the Filtration and Golf Grip businesses currently reported in the company’s Hydraulics segment.

Deep hydraulics knowledge and expertise

Craig Arnold, Eaton Chairman and CEO, said: “We believe Eaton’s Hydraulics business will benefit greatly from being part of a company that has hydraulics at its core. When complete, this deal will bring together two talented teams with deep hydraulics knowledge and expertise. And Eaton’s hydraulics team will be part of a company that is committed to becoming a global leader in mobile and industrial hydraulics. The combined business will also benefit customers and distributors by offering industry-leading technology and a much broader portfolio of hydraulic solutions.”

He added: “This announcement is part of the ongoing transformation of Eaton into a higher growth company with better earnings consistency. We believe this transaction will create substantial value for our shareholders and allow our hydraulics employees to be part of a company that has a strong commitment to the hydraulics industry.”

Once-in-a-lifetime opportunity

Kim Fausing, Danfoss president and chief executive officer, commented that Danfoss is taking a significant and transformational step in creating a global leader in mobile and industrial hydraulics. “It is a once-in-a-lifetime opportunity to combine our largely complementary portfolios and geographic footprints,” he said. “Eaton Hydraulics is a highly respected player in the global industry, recognised for its dedicated people and strong brands. By combining the knowledge and experience of the two businesses, our customers will benefit from unmatched expertise from a single partner. With this agreement, we continue to invest in our core hydraulics business and digital solutions to stay a strong technology partner.”

Organisational similarities

The Danfoss and Eaton Hydraulics businesses have many organisational similarities, including company culture and a focus on customers, R&D and quality. Both businesses are global with complementary geographic footprints and the combined business creates a broader presence across the world. The acquisition will enable Danfoss to enter the industrial hydraulics market that is served by Eaton Hydraulics.

The transaction is subject to customary closing conditions and regulatory approvals and is expected to close by the end of the year.




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