Ingersoll Rand (IR) investor relations material

M&A strategy and integration

• Completed 75 acquisitions in five years, focusing on family-owned, founder-based businesses, with 10 bolt-on deals in the current year at an average pre-synergy EBITDA multiple of 9.5x.

• Integration is decentralized, managed by nine P&L leaders and 60 sub-P&Ls, leveraging a unique ownership mindset and the IRX execution process.

• Targets companies with mid-30s or higher gross margins and unique technology, especially in compressors, blowers, vacuums, and pumps.

• No need to move up the risk curve for M&A as the addressable market is $75 billion and highly fragmented.

• Pipeline remains robust, with allocation based on portfolio quality rather than sector preference.

Energy efficiency and customer ROI

• Compressors account for 30–40% of factory energy use, with 80% of total cost of ownership from electricity.

• Customer payback for energy-efficient compressors is less than two years, averaging 15–18 months.

• Rising energy demand from sectors like data centers is expected to further drive compressor efficiency investments.

Service and recurring revenue model

• Transitioning from traditional parts to a care model with performance guarantees, aiming for $1 billion recurring revenue by 2027 (from $300 million in 2024).

• Care contracts are typically five years, offering high gross margins and doubling lifetime revenue per unit.

• Expanding the care model across the portfolio, including blowers, vacuums, pumps, and power tools.

• Care business gross margin is around 60%, with software solutions like EcoPlant achieving 80%+.