SARASOTA, Fla.–(BUSINESS WIRE)–Helios Technologies (Nasdaq: HLIO) (“Helios” or the “Firm”), a worldwide industrial know-how chief that develops and manufactures options for each the hydraulics and electronics markets, has entered right into a definitive settlement to amass BWG Holdings I Corp. (working as Balboa Water Group, hereinafter “Balboa”) for $218.5 million from funding funds affiliated with AEA Traders LP (the “Acquisition”). Helios plans to fund the Acquisition by way of a mixture of money and present and new credit score amenities. Helios expects to shut the transaction within the fourth quarter of 2020, topic to customary closing situations and regulatory approvals.
Balboa is an revolutionary market chief of digital controls for the well being and wellness trade with proprietary and patented know-how that allows end-to-end digital management techniques for remedy bathtub and spas. Headquartered in Costa Mesa, CA, Balboa is a worldwide operation promoting into 47 totally different international locations and using a brand new state-of-the-art manufacturing facility in Baja, Mexico.
“With this acquisition, we’re additional advancing our Imaginative and prescient 2025 technique by executing on the worth streams targeted on product and know-how growth and market diversification,” commented Josef Matosevic, the Firm’s President and Chief Government Officer. “The addition of Balboa’s complementary know-how to our portfolio enhances our scale and management place in digital management techniques and permits us to strategically increase our product portfolio. We consider the strategic and monetary advantages ensuing from this acquisition are compelling for each our firm and our stakeholders. We sit up for welcoming the Balboa staff to the Helios household and are excited concerning the alternatives forward.”
Complementary Digital Controls Know-how Will increase Addressable Market
Balboa has differentiated, proprietary controls know-how anticipated to reinforce and speed up the Electronics section’s capacity to innovate and propel into new finish markets. Balboa is the chief within the markets it serves with proprietary and patented know-how. Balboa’s AC controls know-how is a good addition to the capabilities of Enovation Controls, a completely owned subsidiary of Helios, which has an extended historical past of deep software information in command of DC (direct present) and battery powered applied sciences. This mix is meant to allow Helios to enter new and adjoining, excessive development markets with a sturdy complementary product portfolio. This Acquisition diversifies Helios’s finish markets, clients and product choices whereas enhancing scale, addressable market and innovation in digital management techniques.
Strong Monetary Contributions
Balboa has delivered compounded annual development within the mid-single digits for practically 10 years and is predicted to attain Adjusted EBITDA margins of roughly 20 p.c by year-end 2021. The Acquisition is predicted to be accretive to Adjusted EPS day one onward, and the primary yr ROIC is predicted to exceed Helios’s WACC. The acquisition value of $218.5 million represents a 2020E Adjusted EBITDA transaction a number of of 9.3x on a professional forma foundation.
Provides Low Price Manufacturing Operations
Balboa makes use of a brand new, state-of-the-art manufacturing facility in Baja, Mexico with the potential to extend capability and optimize prices. This facility might be leveraged to additional optimize the manufacturing and provide chain course of throughout different areas of the Electronics section.
Financing and Closing
Complete consideration for the transaction is $218.5 million. Helios intends to make use of a mixture of money available and present and new credit score amenities. On a professional forma foundation following the shut of the transaction, Helios expects its 2020E year-end internet debt-to-Adjusted EBITDA leverage ratio to be roughly 3.4x. Helios is dedicated to a long-term internet debt leverage goal of lower than 2.0x and expects to proceed to profit from sturdy money flows to assist debt discount and natural development initiatives.
The Acquisition is predicted to shut within the fourth quarter of 2020, topic to customary closing situations and regulatory approvals.
Morgan Stanley & Co. LLC served as monetary advisor and Jones Day as authorized counsel to Helios on this transaction. Houlihan Lokey served as monetary advisors and Fried, Frank, Harris, Shriver & Jacobson LLP served as authorized counsel to Balboa.
Convention Name and Webcast
Helios will host a convention name and webcast as we speak, October 12, 2020 at 9:00 a.m. ET to debate the transaction. The stay convention name is obtainable by dialing (201) 689-8573. The Web webcast and accompanying slide presentation can be accessible right here: www.heliostechnologies.com.
A telephonic replay can be accessible from 12:00 p.m. ET on the day of the decision by way of October 19, 2020. To take heed to the archived name, dial (412) 317-6671 and enter convention ID quantity 13711834. The webcast replay can be accessible within the investor relations part of the Firm’s web site at www.heliostechnologies.com.
About Helios Applied sciences
Helios Applied sciences is a worldwide industrial know-how chief that develops and manufactures hydraulic and digital management options for various markets. The Firm operates in two enterprise segments, Hydraulics and Electronics. The Hydraulics section markets and sells merchandise globally below the manufacturers of Solar Hydraulics for its cartridge valve know-how, Customized Fluid Energy for its hydraulic system design and Sooner which offers fast launch coupling options. International Electronics manufacturers embrace Enovation Controls and Murphy for fully-tailored options with a broad vary of rugged and dependable devices comparable to shows, controls and instrumentation merchandise. Helios Applied sciences and details about its related firms is obtainable on-line at www.heliostechnologies.com.
About AEA Traders LP
AEA Traders LP was based in 1968 by the Rockefeller, Mellon and Harriman household pursuits and S.G. Warburg & Co. as a non-public funding car for a choose group of business household workplaces with substantial property. AEA has a unprecedented international community constructed over a few years which incorporates main industrial households, enterprise executives and leaders; a lot of whom make investments with AEA as energetic particular person buyers (“Members”) and/or be part of its portfolio firm boards or act in different advisory roles. Right this moment, AEA’s roughly 90 funding professionals function globally with workplaces in New York, Connecticut, London, Munich and Shanghai. The agency manages funds which have over $15 billion of invested and dedicated capital together with the leveraged buyouts of center market firms and small enterprise firms and mezzanine and senior debt investments. AEA Non-public Fairness invests throughout three sectors: worth added industrials, shopper, and companies. The AEA Small Enterprise Funds is a method inside AEA that at present manages $1.8 billion of invested and dedicated capital. The staff seeks to assist develop and remodel firms on the decrease finish of the center market by sponsoring rising firms with confirmed administration groups and superior enterprise fashions.
Ahead Trying Info
This information launch incorporates “forward-looking statements” inside the which means of Part 21E of the Securities Change Act of 1934. Ahead-looking statements contain dangers and uncertainties, and precise outcomes could differ materially from these expressed or implied by such statements. They embrace statements relating to present expectations, estimates, forecasts, projections, our beliefs, administration’s plans, projections and targets for future operations, scale and efficiency, integration plans and anticipated synergies therefrom, the timing of completion of the proposed transaction, and assumptions made by Helios Applied sciences, Inc. (“Helios” or the “Firm”), its administrators or its officers concerning the Firm and the trade by which it operates, and assumptions made by administration, and embrace amongst different objects, (i) the Firm’s methods relating to development, together with the anticipated advantages of the Acquisition; (ii) the timing of completion of the Acquisition; (iii) Firm’s financing plans with respective to the funding of the Acquisition; and; (iv) targets for future operations, integration plans and anticipated synergies. Phrases comparable to “could,” “expects,” “initiatives,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such phrases, and comparable expressions are meant to establish such forward-looking statements. Equally, statements that describe our future plans, targets or objectives are also forward-looking statements. These statements are usually not guaranteeing future efficiency and are topic to a lot of dangers and uncertainties. Our precise outcomes could differ materially from what’s expressed or forecasted in such forward-looking statements, and undue reliance shouldn’t be positioned on such statements. All forward-looking statements are made as of the date hereof, and we undertake no obligation to replace any forward-looking statements, whether or not on account of new info, future occasions or in any other case.
Components that would trigger the precise outcomes to vary materially from what’s expressed or forecasted in such forward-looking statements embrace, however are usually not restricted to, the prevalence of any occasion, change or different circumstances that would give rise to the termination of the Acquisition; the danger that the Acquisition won’t be consummated in a well timed method or in any respect; our capacity to acquire the financing essential to consummate the Acquisition; danger that any of the closing situations to the Acquisition is probably not glad or is probably not glad in a well timed method; dangers associated to disruption of administration time from ongoing enterprise operations as a result of Acquisition; failure to comprehend the advantages anticipated from the Acquisition; failure to promptly and successfully combine the Acquisition; and the flexibility of Helios to retain and rent key personnel, and keep relationships with suppliers. Additional info regarding elements that would trigger precise outcomes to vary from these anticipated is included however not restricted to info below the heading Merchandise 1. “Enterprise” and Merchandise 1A. “Danger Components” within the Firm’s Kind 10-Ok for the yr ended December 28, 2019 and Half II, Merchandise IA, “Danger Components” within the Firm’s Kind 10-Q for the quarter ended March 28, 2020 and different filings with the Securities and Change Fee.
Non-GAAP Monetary Measures
This information launch presents forward-looking statements relating to non-GAAP Adjusted EPS, internet debt-to-Adjusted EBITDA leverage ratio, Adjusted EBITDA transaction a number of, and Adjusted EBITDA margin. These non-GAAP monetary measures are derived by excluding sure quantities, bills or revenue from the corresponding monetary measures decided in accordance with GAAP. The willpower of the quantities which are excluded from these non-GAAP measures is a matter of administration judgment and relies upon upon, amongst different elements, the character of the underlying expense or revenue acknowledged in a given interval. Helios is unable to current a quantitative reconciliation of those forward-looking non-GAAP monetary measures to their most immediately comparable forward-looking GAAP monetary measures as a result of such info shouldn’t be accessible, and administration can’t reliably predict all the mandatory elements of such GAAP measures with out unreasonable effort or expense. As well as, the Firm believes that such reconciliations would indicate a level of precision that might be complicated or deceptive to buyers. The unavailable info may have a big impression on Helios’s full yr 2020 monetary outcomes. These non-GAAP monetary measures are preliminary estimates and are topic to dangers and uncertainties, together with, amongst others, adjustments in reference to quarter-end and year-end changes. Any variation between Helios’s precise outcomes and preliminary monetary knowledge set forth above could also be materials.