Eaton sells its Hydraulics business to DanfossERT

Power management company Eaton announced it has entered into an agreement to sell its Hydraulics business to Danish industrial company Danfoss, for $3,3 billion in cash. The amount represents a 13,2 multiple of 2019 Ebitda.

Eaton’s hydraulics business accounted for 86% of Eaton’s Hydraulics segment revenue in 2019, operating globally in hydraulics components, systems and services for industrial and mobile equipment. In 2019 the business had sales of $2,2 billion, and employed approximately 11.000 people. Eaton is retaining the Filtration and Golf Grip businesses currently reported in the company’s Hydraulics segment.

“This operation is part of the ongoing transformation of Eaton into a higher growth company with better earnings consistency – said Craig Arnold, Eaton chairman and chief executive officer -. We believe this transaction will create substantial value for our shareholders and allow our hydraulics employees to be part of a company that has a strong commitment to the hydraulics industry”.

On the other side, thanks to the combination of the knowledge and experience of the two companies, Danfoss’ customers will benefit from significantly increased expertise from a single partner.