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Ingersoll Rand (IR) to Acquire Howden Roots in $300M Deal

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Ingersoll Rand (IR - Free Report) has entered into a definitive agreement to acquire Howden Roots LLC from Chart Industries, Inc. (GTLS - Free Report) in an all-cash deal of approximately $300 million.

The acquisition will expand IR’s low-pressure compression and vacuum product offerings and add centrifugal compression capabilities. It will create opportunities for IR to serve high growth, sustainable end markets, such as green steel. Ingersoll Rand sports a Zacks Rank #1 (Strong Buy).

As for Chart Industries, which carries a Zacks Rank #3 (Hold), the divestiture will accelerate its deleveraging plan and allow it to focus on core strategic solution offerings and integration efforts.

Chart Industries will treat the Roots business for accounting purposes as assets held for sale effective Mar 17, 2023, until the closure of the deal.

Subject to regulatory approvals, the transaction is expected to close in the third quarter of 2023. Roots will be part of IR’s Industrial Technologies & Services segment.

Upon closing, Ingersoll Rand expects the transaction to yield adjusted EBITDA margins of more than 30% by the third year.

IR focuses on expanding its market presence, solidifying its customer base and enhancing product offerings through acquisitions. In January 2023, the company completed the acquisition of SPX FLOW’s Air Treatment business, boosting its core compressor product offering through a complementary product portfolio of energy-efficient compressed air dryers, filters and other consumables. The Air Treatment business is part of IR’s Industrial Technologies and Services segment.

Last October, Ingersoll Rand acquired Dosatron International, expanding its digital technology portfolio and opening up opportunities in hydroponics, horticulture, animal health, food safety and sanitation, along with water treatment end markets. The September 2022 acquisition of Westwood Technical Limited expanded IR’s Industrial Internet of Things (IIoT) offerings. Successive acquisitions drive the company’s top line. In first-quarter 2023, acquisitions contributed 5.8% to total revenues.

Other Stocks to Consider

Apart from Ingersoll Rand, some other top-ranked stocks within the broader Industrial Products sector are as follows:

Flowserve (FLS - Free Report) currently sports a Zacks Rank #1. The company pulled off a trailing four-quarter earnings surprise of 2.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

Flowserve has an estimated earnings growth rate of 64.5% for the current year. Shares of the company have gained 25.2% in a year.

Graco (GGG - Free Report) currently flaunts a Zacks Rank #1. The company delivered a trailing four-quarter earnings surprise of 7.9%, on average.

Graco has an estimated earnings growth rate of 16.4% for the current year. Shares of the company have rallied 44% in a year.

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