Flow International Corporation, a developer/manufacturer of industrial waterjet machinery, agreed to a takeover by American Industrial Partners (AIP), a private equity firm. The transaction is valued at more than $200 million, and offers Flow shareholders an exchange of $4.05/share in cash.
The sale follows several other recent sale agreements for manufacturing technology companies, including Fair Friend Group buying MAG’s Industrial Equipment business, and Kennametal’s purchase of ATI’s Tungsten Materials division.
Directors of Kent, Wash.-based Flow already have endorsed the merger agreement. The company supplies ultrahigh-pressure waterjet machines for cutting and cleaning in automotive, aerospace, job shop, stone interiors, surface preparation, food processing, and other industries.
"This transaction represents a successful conclusion to our extensive 'strategic alternatives' investigation, during which the company contacted many strategic and financial partners,” explained Charley Brown, president and CEO of Flow.
“In AIP, we have a partner with a strong reputation and proven record of success, who understands the potential of Flow's waterjet solutions and has the resources and expertise to help accelerate our growth plans,” Brown continued. “We believe this transaction appropriately recognizes the value of Flow's technology and customer relationships, while providing our stockholders with a meaningful cash premium for their investment."
Richard Hoffman, an AIP partner, said his organization recognized Flow’s technological assets and its “strong relationships with its global customer base. We will work with the Flow management team to continue investing in the company's technology to grow the waterjet share of the worldwide cutting market."
American Industrial Partners invests in North American-based industrial businesses serving domestic and global markets. Since its founding in 1989, AIP has completed over 40 transactions and currently manages over $1.1 billion in equity capital.
The transaction is expected to close in early 2014, pending approval by Flow's shareholders, regulatory approvals, and other standard conditions.
At least two investor-advocate law firms have declared an interest in the proposed sale, with one of these firms claiming it is investigating Flow’s directors “for potential breaches of fiduciary duties in connection with their conduct related to the sale”.
