Dive Brief:
- Madison Air Solutions reached an agreement on Monday to acquire Germany-based HVAC company Ebm-Papst for $5.4 billion.
- The acquisition will extend the reach of Madison Air’s commercial segment. Ebm-Papst is anticipated to make about $2.8 billion in revenue and about $343 million in adjusted earnings before interest, taxes, depreciation, and amortization in 2026, according to the press release.
- The fan maker will use cash, debt and equity financing to complete the Ebm-Papst transaction, which is expected to close at the end of the year.
Dive Insight:
Ebm-Papst is headquartered in Mulfingen, Germany, and was established in 1963. The company has more than 13,000 employees worldwide, with operations in about 40 countries including two U.S. sales offices in Connecticut and Tennessee, according to the website.
Madison Air has also been one of the Germany-based manufacturer’s longstanding customers, President and CEO Jill Wyant said in a statement.
“As a longstanding Ebm-Papst customer, we have a deep appreciation for its integrated airflow technology, custom engineering expertise and talented team, which complement our expertise in mission-critical applications and market reach,” she said.
Wyant provided more details on how the acquisition is a good fit for Madison Air’s strategy during a call with analysts on Monday. She said the strategy is “built around three core strengths that work together to deliver better air, stronger customer outcomes, and attractive long-term returns,” which she believes the acquisition will strengthen.
“Its differentiated, integrated airflow technology further strengthens our return on air capabilities,” Wyant said. “It broadens our ability to scale in mission-critical applications and attractive growth markets, and it gives us another strong platform where we can apply our commercial capabilities, operating discipline, and 80/20 approach to accelerate value creation.”
Madison Air serves 15 end markets worldwide, including data centers, hospitals and health care, life sciences, semiconductor chip fabs and power generation systems, Wyant said in a July 30 earnings call.
The semiconductor industry is one example where Madison Air can increase its business and footprint.
Its HVAC brand, Nortek Air Solutions, currently uses design assistance software to help operators seal grids, filtrate and recirculate, and use air handling systems to keep chip fabs ultra clean.
With Ebm-Papst involved, it will enhance Nortek’s outcomes, Wyant said. The company’s fan technology and artificial intelligence-designed capabilities will complement Nortek’s design assistance software, enabling engineers to configure, simulate and optimize fan performance much earlier in the manufacturing process, she said.
The acquisition will also strengthen Madison Air’s in the commercial markets and help it gain more repeat customers by introducing Ebm-Papst's electronically commutated fan technology and design capabilities together with its application sector.
Madison Air is a subsidiary of Madison Industries. In April, Madison Air went public and began trading on the New York Stock Exchange.
Other air quality brands Madison Air operates and manufactures includes Big Ass Fans, Bonanza, PoolPak and Zephyr.
