Carlisle Companies reported that it has entered into a definitive agreement to acquire Henry Company, a provider of building envelope systems, from affiliates of American Securities LLC, a leading U.S. private equity firm.
Under the terms of the agreement, Carlisle will purchase Henry for $1.575 billion in cash. The purchase price represents 10.5x Henry’s adjusted EBITDA for the 12 months ending May 31, 2021, when including run-rate cost synergies.
Henry provides residential and commercial building envelope systems that control the flow of water, vapor, air and energy in a building. Its portfolio is comprised of an assortment of complementary products.
Henry serves the full spectrum of customers across both new construction and repair and restoration projects within the residential, light commercial, and commercial end-markets. Henry generated revenue of $511 million and adjusted EBITDA of $119 million, representing an adjusted EBITDA margin of 23%, for the twelve months ending May 31, 2021.
The acquisition is consistent with Carlisle’s “Vision 2025” to simplify its portfolio and strategically build scale with synergistic acquisitions in order to achieve $15 of earnings per share.
The acquisition is expected to generate pre-tax cost synergies of approximately $30 million by 2025. Additional revenue synergies from cross-selling a broader product portfolio through Carlisle’s existing relationships and sales channels are also expected. The transaction is expected to be approximately $1.25+ accretive to adjusted EPS in the first full fiscal year.
The acquisition, which is subject to customary closing conditions, is expected to close in the third quarter of 2021.