Chart Industries, Inc. announced that on September 20, 2017 it completed the acquisition of Hudson Products Corporation for $410 million in cash from Riverstone Holdings LLC.
The signing of the definitive agreement was previously announced June 30, 2017. Founded in 1939, Hudson is a trusted leader in heat transfer solutions with an array of strong brands and products used in refining, HVAC, petrochemical, natural gas, power generation, industrial and commercial end markets.
Hudson is a North American leader in air-cooled heat exchangers (“ACHXs”) and a global leader in axial flow cooling fans (“fans”). Its installed base of over 20,000 ACHXs and 250,000 fans globally provides stable aftermarket revenue streams, which account for approximately 37% of Hudson’s total net sales. Hudson complements Chart’s Energy & Chemicals (“E&C”) segment with the addition of its FinFan® brand and other ACHXs which broaden E&C’s end market diversity from primarily LNG, industrial and natural gas to include HVAC, petrochemical and power generation.
The addition of Hudson’s fans business, known by the Tuf-Lite® brand, is a new product category for Chart, and allows E&C to offer a broader technology solution for our customers.
“Hudson and Chart’s innovative, engineering-focused cultures will work well together to continue to develop full-service solutions,” commented Chart’s CEO, Bill Johnson. “This acquisition expands our E&C LifeCycle aftermarket presence from $50 million to $125 million in annual revenue.” Hudson is expected to generate net sales of approximately $205 million in 2017 and EBITDA margin of 20%. Management expects the transaction to be accretive to adjusted earnings per share in 2018.
Annual cost synergies of approximately $7 million are expected to be realized within 18 months of closing. Hudson will report through Chart’s E&C segment. Credit Suisse served as exclusive financial advisor and Jones Day served as legal advisor to Chart. Goldman Sachs & Co. LLC served as exclusive financial advisor and Latham & Watkins LLP served as legal advisor to Hudson.
