ITT (ITT) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition accelerates the 2030 vision by expanding into high-growth, high-margin businesses and reducing automotive exposure to about 20% of the portfolio.

• Adds a $1.3B highly profitable flow platform, bringing leading brands in pumps, valves, mixers, and heat exchangers, and strengthens positions in industrial, health, nutrition, and personal care markets.

• Expands the total addressable market to over $60 billion and doubles industrial process aftermarket sales.

• Strong cultural alignment with a shared focus on continuous improvement, engineered components, and customer value.

• Enhances recurring aftermarket revenue streams and broadens global presence.

Financial terms and conditions

• Purchase price is $4.775 billion in cash and equity, including $700 million in common stock to the seller.

• Valuation is 14.2x 2026E adjusted EBITDA, or 11.5x including expected cost synergies.

• Funded through debt and equity, with fully committed financing facilities and $700 million in common stock issued to Lone Star.

• Net leverage projected below 3x at closing and below 2x within 18 months, maintaining investment grade rating.

• Transaction expected to be immediately accretive to gross and adjusted EBITDA margins, with adjusted EPS accretion in 2026 and double-digit EPS accretion in the first full year post-close (excluding intangible amortization).

Synergies and expected cost savings

• $80 million run-rate cost synergies targeted by end of year three post-close, with two-thirds captured by end of year two.

• Synergies mainly from G&A/back-office consolidation, procurement optimization, and leveraging low-cost facilities in Poland and China.

• One-time cost to achieve synergies is $96 million.

• Revenue synergies are not included in the model but will be pursued, especially via expanded geographic reach and channel sharing.

• Opportunity for incremental revenue growth leveraging proven market outperformance.