Allison Transmission (ALSN) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition accelerates growth and innovation, expanding into on-highway, off-highway, and defense markets with complementary capabilities and product portfolios.

• Broadens global reach and customer base, with over 70% of Dana's off-highway revenue outside North America and an enlarged engineering and manufacturing footprint.

• Expands product range with axles, gears, gearboxes, and electrified propulsion solutions, including mature alternative propulsion technologies.

• Strengthens position in construction, mining, agriculture, and other industrial segments, opening access to adjacent and attractive end-markets.

• Enhances core technologies and innovation in electrification, software, and controls.

Financial terms and conditions

• Purchase price is $2.7 billion, financed with new debt and cash on hand; 100% cash consideration.

• Represents a 6.8x multiple on 2024 adjusted EBITDA ($400 million), or 5.2x including $120 million in annual run rate synergies.

• Transaction is immediately accretive to diluted EPS and approved by both Boards.

• Fully committed debt financing, with $753 million cash and $744 million available under the revolving credit facility as of March 31, 2025.

• Expected net leverage of less than 3.0x at close, targeting less than 2.0x near-term.

Synergies and expected cost savings

• Identified annual run rate synergies of $120 million, primarily from operations, procurement, R&D, and SG&A.

• Substantial achievement of synergies expected by year four.

• Revenue synergies not included in initial estimates; focus is on cost synergies near term.

• Cost savings to support value creation and operational excellence.