Knowles Corporation announced it has entered a deal to acquire Cornell Dubilier for $263 million as it positions itself for faster growth.
The company’s shares rose 2.6% to $14.62 in early New York trading on Monday.
Knowles, a manufacturer of micro-acoustic microphones and speakers, said the acquisition adds film, electrolytic and mica capacitors to its product offerings. These are used in medtech, military, aerospace, and industrial electrification applications.
The transaction forms part of strategic actions it is taking to accelerate its transformation to an industrial technology company focused on higher growth and higher value opportunities, the company said in a statement.
“Adding Cornell Dubilier’s impressive, broad-based roster of OEM (original equipment manufacturer) and distribution partner customers, as well as its leading capabilities in capacitor technology will expand the applications for Knowles’ products,” Knowles CEO Jeffrey Niew commented.
“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.”
Cornell Dubilier CEO Jim Kaplad added: “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.”
The acquisition cost includes 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.
Knowles also announced it is reviewing strategic alternatives for its Consumer MEMS Microphones business as part of its business transformation and is looking for potential partners to accelerate the business’s return to growth.
It said it has engaged Jefferies LLC to assist in the CMM strategic review.
Contact the author at stephen.gunnion@proactiveinvestors.com