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Nordson To Acquire Precision Control Systems Firm ARAG For $1B

Deal expected to expand ARAG's presence in North American market and generate Nordson-like gross margins
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Nordson Corporation has agreed to acquire ARAG Group and its subsidiaries in an all-cash transaction for €960 million (US$1 billion).

ARAG is a global market and innovation leader in the research, production, and supply of precision control systems and smart fluid components for agricultural spraying, with headquarters in Rubiera, Italy. 

Its portfolio comprises three key product families: fluid components, smart components, and control systems. ARAG supports its customers through seven manufacturing and distribution facilities worldwide and a sales network spanning more than 80 countries.

“Precision dispensing is a core capability of Nordson. Over nearly 70 years, we’ve expanded that expertise beyond our beginnings in industrial applications into packaging, product assembly, nonwovens, electronics, medical and more,” said Sundaram Nagarajan, president and chief executive officer of Nordson Corporation in a statement to Businesswire.

ARAG is expected to generate €155 million in sales in FY23. The transaction reflects a valuation of ~16.5 times ARAG’s projected FY23 EBITDA. It will operate as a division in Nordson’s Industrial Precision Solutions segment.

A Hundred dollar bills illustration in Poland on 21 September 2022. Nordson Corporation to acquire ARAG Group and its subsidiaries in an all-cash transaction of US$1 billion. JAAP ARRIENS/NURPHOTO VIA GETTY IMAGES

“The transaction is another step forward in the company’s so-called “Ascend Strategy,” and that ARAG’s technology generates “Nordson-like gross margins,” said Jeffrey Pembroke the Nordson executive vice president. 

“Well established and known in Europe and South America, we will be able to leverage Nordson’s strong brand and commercial infrastructure to expand ARAG’s limited presence in the North American market,” said Pembroke. 

Nordson held cash and cash equivalents of $129.07 million as of April 30, 2023.

The transaction is expected to close in Nordson’s fourth quarter, funded through cash on hand and financial debt.

NDSN shares closed at $235.74 on Friday.

© 2023 Zenger Zenger News does not provide investment advice. All rights reserved.

Produced in association with Benzinga

Edited by Judy J. Rotich and Virginia Van Zandt

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