Eaton sells its hydraulic business

On January 22, 2020, global power management company Eaton (NYSE: ETN) today announced the sale of its hydraulic business, and reached an agreement with Danfoss A / s, a Danish industrial company, to sell it for $3.3 billion in cash, which is 13.2 times of EBITDA in 2019.

Eaton's hydraulic business accounts for 86% of the company's hydraulic group's total revenue in 2019. It is an important supplier of hydraulic components, systems and services for industrial equipment and walking machinery. The business has sales of $2.2 billion in 2019 and currently employs about 11000 people. The filtration business and golf club grip business of hydraulic group will remain in Eaton.

"This decision is an important step in Eaton's transformation into a company with higher growth and better sustainable profitability." Craig Arnold, chairman and chief executive of Eaton, said, "we believe that this transaction will create considerable value for shareholders, and employees in the hydraulic business will have the opportunity to be part of a firm commitment to the hydraulic industry." Kim fausing, President and CEO of Danfoss, said: "Eaton's hydraulic business is highly appreciated in the global hydraulic market and is known for its dedicated talents and strong brand position. By combining the expertise and industry experience of the two companies, we believe that our customers can further benefit from the professional support and services provided by a single partner. "

The deal is subject to customary closing conditions and regulatory approval and is expected to be completed by the end of this year.