MAYFIELD HEIGHTS, Ohio—Parker Hannifin Corp. has entered into a definitive agreement to acquire Lord Corp. for about $3.68 billion in cash.
The transaction has been approved by each company's board of directors and is subject to customary closing conditions, which includes receiving regulatory approvals.
Once complete, Parker said Lord will be combined with its Engineered Materials Group.
"This strategic transaction will reinforce our stated objective to invest in attractive margin, growth businesses—such as engineered materials—that accelerate us toward top-quartile financial performance," Tom Williams, Parker chairman and CEO, said in a statement. "Lord will significantly expand our materials science capabilities with complementary products, better positioning us to serve customers in growth industries and capitalize on emerging trends such as electrification and lightweighting."
Headquartered in Cary, N.C., Lord is a privately-held company founded in 1924 that offers a variety of adhesives, coatings, specialty materials, vibration and motion control technologies. The firm reported 2018 sales of about $1.1 billion with about 3,100 employees throughout 17 manufacturing and 15 research and development facilities globally.
Lord has significantly expanded its operations in the last year to capitalize on E-mobility trends within the automotive industry. In May 2018, the firm disclosed plans to invest $80 million to expand and upgrade operations at its 250,000-sq.-ft. plant in Saegertown. During the next five years, Lord will add 75,000 square feet to the building, which sits on a 67-acre plot and employs 235.
Most recently, the firm began construction in March on an expansion to its Hueckelhoven, Germany, facility—a $15.8 million investment to build a 35,000-sq.-ft. addition adjacent to the current 70,000-sq.-ft. facility. The project will create more than 20 additional jobs and is expected to be operating by mid-2020.
The firm also in 2018 repurposed space at its site in Indianapolis to add more production.
"We look forward to joining our teams and cultures, each of which places significant focus on safety, engaged people participating in high performance teams, customer experience, profitable growth and top quartile performance," Williams said. "Our shared values, built over the long histories of both companies, make our two companies an ideal match."
Parker said Lord will strengthen its business in a variety of ways, first by greatly expanding its Engineered Materials Business by adding strong brands, including Lord, Chemlok, Fusor, Maxlok, Lord Adhesives, Versilok, LokRelease, CoolTherm, Lord High Capacity Laminate Elastomeric Bearings, Dynaflex and SensorCloud.
Lord also will strengthen Parker's offering of complementary products in core markets like aerospace, defense, automotive and industrial. Parker said Lord's products will offer it enhanced opportunities to capitalize on emerging electrification and lightweighting trends.
"With complementary business segments, coming together with Parker enables Lord to carry out our grander vision," Ed Auslander, CEO and president of Lord, said in a statement. "Parker is already a large Tier 1 supplier in many areas, allowing our business lines immediate access to growth, additional markets, applications and new customers. In addition, the two companies are very much aligned when it comes to core values, great business acumen and cultural fit."