Ingersoll Rand announces $2.3bn acquisition of ILC Dover from New Mountain Capital

Ingersoll Rand Inc. (NYSE:IR), renowned for its mission-critical flow creation and industrial solutions, has entered a definitive agreement to acquire ILC Dover from New Mountain Capital, LLC, a prominent investment firm managing around $50 billion in assets. This acquisition, valued at an upfront cash price of approximately $2.325 billion with an additional earnout based on 2024 operational efficiency metrics, is a strategic expansion into the high-growth life sciences sector for Ingersoll Rand. The deal is set to enhance Ingersoll Rand’s portfolio, establishing a robust life sciences platform within its Precision and Science Technologies (P&ST) segment.

ILC Dover, a global leader in the design and production of innovative solutions for the biopharmaceutical, pharmaceutical, medical device, and space industries, boasts a 75-year legacy of innovation. The acquisition is poised to bolster Ingersoll Rand’s life sciences offerings, adding ILC’s extensive engineering and production capabilities, with over 2,000 team members across 11 facilities in North America, Europe, and Asia.

In the wake of the acquisition, Ingersoll Rand will form a life sciences platform, incorporating ILC and its life science-focused brands like Thomas, Welch, Zinsser Analytic, and others. This new platform, expected to generate around $700 million in revenue, signifies Ingersoll Rand’s targeted investment and growth strategy in the life sciences industry. Corey Walker, the current President and CEO of ILC, will lead this platform, joining Ingersoll Rand’s leadership team.

Vicente Reynal, chairman and CEO of Ingersoll Rand, highlighted the acquisition’s strategic importance, stating, “This acquisition is the next phase of our long-term vision to expand into higher-growth end markets like life sciences.” He further emphasized the potential for synergies between Ingersoll Rand and ILC, particularly in enhancing key biopharma and pharma production processes with ILC’s single-use solutions.

Corey Walker expressed enthusiasm for the merger, emphasizing the combined portfolio’s ability to serve customers from discovery to commercial production of therapies. He also noted the acceleration potential in customer service across workflows, thanks to the complementary capabilities of Ingersoll Rand and ILC.

Andre Moura, managing director at New Mountain Capital, praised the growth and operational advancements at ILC under their ownership since early 2020. Moura expressed confidence in the fit between Ingersoll Rand and ILC, anticipating further growth and success under the new partnership.

This acquisition, expected to close in Q2 2024 pending regulatory approvals, is projected to be immediately accretive to Ingersoll Rand’s growth and margin rates. With ILC’s revenue growth at a mid-teens CAGR organically over the last three years and expected revenue of nearly $400 million in 2024, along with mid-30s adjusted EBITDA margins, Ingersoll Rand foresees a significant return on invested capital within the first three years.

The acquisition demonstrates Ingersoll Rand’s commitment to diversifying its offerings and investing in the rapidly evolving life sciences sector, promising sustained growth and innovation.