Atlas Copco Acquires Edwards Group For $1.2B

Atlas Copco

Atlas Copco AB (STO:ATCO-A) (STO:ATCO-B) (OTCMKTS:ATLKY), the Swedish engineering firm, announced Monday that it has agreed to buy Edwards Group Ltd – ADR (NASDAQ:EVAC) of Britain. Atlas Copco chief Ronnie Leten said that it will pay $9.25 per share of the British industrial technology company, plus another $1.25 a share depending on the financial performance of Edwards Group this year. The deal values Edwards Group at up to $1.6 billion, including $400 million in debt assumption.

Atlas Copco

Edwards a perfect match for Atlas Copco

The deal gives a 24% premium to the British vacuum technology supplier’s closing price on Friday. Atlas Copco AB (STO:ATCO-A) (STO:ATCO-B) (OTCMKTS:ATLKY) CEO Ronnie Leten said that Edwards Group Ltd – ADR (NASDAQ:EVAC) fits perfectly with the air compressor business of the Swedish firm. Atlas Copco AB has over 40,000 employees across the globe, and is one of the Sweden’s largest industrial conglomerates. However, the company has been facing difficulties over the past few years. Slowing demand for commodities has kept the mining sector volatile, affecting Atlas Copco’s earnings, reports Mark Scott of the New York Times.

Atlas Copco AB (STO:ATCO-A) (STO:ATCO-B) (OTCMKTS:ATLKY) has been one of the most favorite stocks for investors. Its share prices have risen more than 200% since the 2008 financial crisis. Ronnie Leten has been persuading Edwards Group Ltd – ADR (NASDAQ:EVAC) since 2006. Edwards Group is a leading manufacturer of vacuum pumps with more than 3,200 employees. It generated £595 million in revenues last year. Private equity firm CCMP Capital Advisors and Unitas Capital are the major shareholders in the company.

Atlas Copco to cut its reliance on mining and construction

Analysts believe that the acquisition will help Atlas Copco AB (STO:ATCO-A) (STO:ATCO-B) (OTCMKTS:ATLKY) lower its dependence on mining and construction equipment business. The British company is expected to contribute to 7% of Atlas Copco’s revenues. The companies expect to close the deal in the first quarter of 2014.

American shares of Atlas Copco AB (STO:ATCO-A) (STO:ATCO-B) (OTCMKTS:ATLKY) rose 2.96% to $28.15 at 10:03 AM EDT, while Edwards Group Ltd – ADR (NASDAQ:EVAC) shares were up 17.50% to $9.93.

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About the Author

Vikas Shukla
Vikas Shukla has a strong interest in business, finance, and technology. He writes regularly on these topics. - He can be contacted by email at [email protected]

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