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CSW Industrials Announces Definitive Agreement to Acquire Motors & Armatures Parts for $650 Million, Accelerating Disciplined Capital Allocation and Capitalizing on Complementary Portfolio in the HVAC/R End Market
Globenewswireยท2025-10-01 12:30

Core Viewpoint - CSW Industrials, Inc. has announced the acquisition of Motors & Armatures Parts (MARS Parts) for $650 million in cash, with an additional earn-out of up to $20 million based on revenue targets, aiming to enhance its HVAC/R product portfolio and drive profitable growth [2][5]. Financial Summary - The cash purchase price represents 10.5x pro-forma TTM EBITDA adjusted for identified synergies and approximately 12.5x MARS Parts' estimated adjusted TTM EBITDA of $51.8 million [2][6]. - CSW plans to fund the acquisition through a Syndicated Term Loan A and its existing $700 million revolving credit facility, with closing expected in the third quarter of the 2026 fiscal year [2][4]. - The acquisition is expected to be immediately accretive to CSW's EPS and EBITDA, with a projected run rate EBITDA margin from MARS Parts of at least 30% within 12 months post-closing [6][4]. Strategic Fit - MARS Parts is a leading distributor of HVAC/R parts in North America, providing a comprehensive line of HVAC/R electrical products, which will strategically complement CSW's existing Contractor Solutions business [3][5]. - The acquisition aligns with CSW's established criteria to leverage existing distribution channels and expand product offerings in the HVAC/R market [6][3]. - CSW anticipates significant cost synergies through optimizing facilities, scaling supply chains, and reducing duplicative spending, which will enhance the overall customer experience [4][6]. Growth Potential - The acquisition is expected to enhance CSW's competitive advantage by adding complementary products and expanding its market presence in the HVAC/R sector [3][5]. - CSW has invested over $1.65 billion in acquisitions over the past ten years, with approximately $1 billion in the last year alone, indicating a strong commitment to growth [6][7].