IDEX to Buy Mott for $1B to Boost Fluidics and Filtration Tech

Illinois fluidics systems manufacturer IDEX (NYSE: IEX) announced its plan to acquire Mott, a Connecticut company specializing in advanced filtration and fluid control solutions, for $1 billion. In a tough time for the industrial sector with economic uncertainties and a tight labor market, this deal injects a much-needed boost.

IDEX creates fluidics systems like pumps and flow meters, which control liquids and gases in various applications such as water treatment and chemical processing. The company also makes firefighting equipment like nozzles and rescue tools, and dispensing tools for mixing and metering paint. Mott, on the other hand, specializes in advanced filtration products that manage and filter fluids and gases. The brand uses Renishaw machines to build finished parts with controlled porosity, a unique capability of Mott. This advanced 3D printing technique allows the firm to create components with specific pore sizes and distributions, enhancing their filtration and fluid control solutions. In addition, Mott has expanded its range of advanced material applications by printing in plastics and ceramics.

Mott’s 3D printed heat exchangers. Image courtesy of Mott Corporation.

By merging, IDEX can incorporate Mott’s filtration technology and additive manufacturing technique into its own fluidics systems. This integration could improve overall performance by providing more accurate and reliable fluid and gas management, reducing issues like blockages and contamination, and enabling better product customization. Additionally, it will allow IDEX to offer more advanced solutions and expand its reach in high-tech industries where precise filtration is crucial, such as biotechnology and aerospace.

Finalization of this agreement is expected by the third quarter of 2024, pending regulatory approvals and subject to standard adjustments. The transaction will be funded through a combination of cash on hand, borrowings from IDEX’s current credit facility, and potential debt issuance.

The net transaction value, after accounting for approximately $100 million in expected tax benefits, is around $900 million. The purchase price is about 19 times what Mott is expected to earn in 2024 and around 15 times what Mott is expected to earn in 2025. This deal is forecasted to boost IDEX’s earnings per share by 2026.

Mott 3D prints with porous polymers. Image courtesy of Mott Corporation.

Mott Corporation, a leader in the design and manufacturing of sintered porous materials and flow control solutions, has a long history of solving complex engineering challenges. For over 60 years, Mott has partnered with major technical brands and original equipment manufacturers (OEMs) across various markets, including semiconductor, energy, water, and space, to develop customized solutions for precise fluid and gas control.

IDEX CEO Eric Ashleman said in a LinkedIn post: “In all my years at IDEX, I’ve never felt quite like this about a new company joining our family of brands. As I continue meeting Mott Corporation team members, my view is confirmed, Mott is a “mini-IDEX.” Their culture of trusting great teams and passion for partnering with customers closely to develop critical technology solutions aligns perfectly with ours.”

The executive points out that Mott’s business aligns perfectly with IDEX’s focus on highly engineered, mission-critical components tailored for scalable applications. Moreover, he says this acquisition is a critical step to boost IDEX capabilities in applied materials technologies, allowing the brand to better serve high-value end markets and open new growth opportunities.

Mott is expected to join IDEX’s Health & Science Technologies segment, which is forecasted to generate approximately $200 million in revenue in 2024 and an EBITDA margin in the low 20s. The company’s advanced technical and application expertise is expected to bolster IDEX’s offerings in various industries, including semiconductor wafer fabrication equipment, energy transition, medical technologies, space and defense, and water purification.

IDEX headquarters. Image courtesy of IDEX Corporation.

By adding Mott’s expertise, IDEX hopes to expand its portfolio of high-value businesses, including IDEX Optical Technologies, which specializes in optical filters and coatings, and the Muon Group, known for its micro-precision components. What’s more, IDEX hopes that Mott’s strong relationships with OEM customers will help build new partnerships and meet unique customer needs by providing customization.

Combining the strengths of both companies is expected to drive growth and improve earnings through the 80/20 business improvement process, which focuses on prioritizing the most profitable products, customers, and processes to maximize efficiency and results.

Ashleman highlighted the cultural fit between IDEX and Mott, mentioning shared values such as a deep passion for solving customer challenges through technical capabilities and innovative solutions: “Our great teams combine to offer meaningful go-to-market opportunities. We look forward to welcoming the over 500 Mott employees to IDEX.”

Similarly, Mott’s President and CEO, Boris Levin, shared his excitement about the merger. He said that joining a leading company like IDEX, which has a strong history of solving complex customer problems, is a great opportunity. Levin noted that Mott brings valuable expertise in material science, chemistry, and applications, as well as a strong customer base and new growth opportunities. He believes that combining these strengths with IDEX’s size, top market positions, and advanced technology will create great synergies.