Liberty company being sold for $263M

Liberty company being sold for $263M

September 25, 2023 | SC News Biz

A Liberty-headquartered company has agreed to a deal in which it will be purchased for $263 million by an Illinois company looking to expand its reach as an industrial technology company.

Cornell Dubilier, until now a privately held company, said it will be sold to Knowles Corp. of Itasca, Ill.

Cornell Dubilier is a technology company and manufacturer of high-performance film, electrolytic and mica capacitors used in demanding medtech, defense and aerospace, and industrial electrification applications. Knowles Corp. is a global supplier of high-performance components and solutions, including ceramic capacitors and radio frequency filters, advanced medtech microphones and balanced armature speakers and audio solutions. The company said in a news release that the acquisition fits in with its strategy to accelerate its transformation to an industrial technology company focused on higher growth and higher value opportunities.

Knowles has entered into a definitive agreement to acquire Cornell Dubilier in an all-cash transaction. Cornell Dubilier has 35,000 customers and an annualized revenue of more than $135 million, the news release said.

“We are thrilled to be joining Knowles, which shares our culture of innovation,” Cornell Dubilier CEO Jim Kaplan said in the release. “Like Knowles, some of the world’s most respected companies rely on Cornell Dubilier’s technologies, and together, we will be well positioned to offer even more cutting-edge products and solutions to our customers and drive growth.”

For Knowles, the deal increases exposure to high-growth end markets and diversifies and expands product portfolio.

“Adding Cornell Dubilier’s impressive, broad-based roster of OEM and distribution partner customers, as well as its leading capabilities in capacitor technology will expand the applications for Knowles’ products,” Knowles CEO Jeffrey Niew said in the release. “We will be well positioned to grow with new and existing customers as we work to generate stronger earnings and cash flow and create shareholder value. We admire the outstanding company and culture built by the Kaplan family over the past 40 years and we look forward to welcoming Cornell Dubilier’s talented employees to Knowles.”

The total cost of the acquisition is $263 million and consists of a $140 million cash payment at closing and an interest-free seller note of $123 million, with $50 million maturing one year from closing and the remaining $73 million maturing two years from closing, the release stated. The total fair value of the consideration transferred is estimated at $250 million and represents 9.6 times Cornell Dubilier’s trailing-12-month adjusted EBITDA — earnings before interest, taxes, depreciation and amortization —  inclusive of run-rate cost synergies. Knowles expects to finance the acquisition with a combination of cash on hand, borrowings from its existing revolving credit facility, and the seller note, the release stated.

The acquisition is expected to close in the fourth quarter of 2023, subject to regulatory approvals and other customary closing conditions. J.P. Morgan is serving as the exclusive financial adviser to Knowles and Foley & Lardner LLP is serving as its legal adviser.

Knowles is a global provider of advanced micro-acoustic microphones and balanced armature speakers, audio solutions, and high performance capacitors and RF products, serving the consumer electronics, medtech, defense, electric vehicle, industrial and communications markets. Founded in 1946, Knowles is a global organization with employees in more than a dozen countries. 

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