- Emerson Electric Co. (NYSE:EMR) has agreed to sell its InSinkErator business to Whirlpool Corp (NYSE:WHR) in a $3 billion all-cash transaction.
- InSinkErator’s trailing twelve-month revenue, as of March 31, 2022, was $595 million, pretax earnings were $148 million, and EBITDA was $166 million, representing a transaction value of 18.1x EBITDA.
- InSinkErator, a manufacturer of food waste disposers and instant hot water dispensers, was founded in 1938 and acquired by Emerson in 1968. InSinkErator has nearly 1,400 employees.
- The transaction is expected to close in Emerson’s FY23.
- Whirlpool expects the acquisition to be immediately accretive to margins, adding ~$1.25 EPS accretion in FY23.
- InSinkErator will operate as a separate business as part of Whirlpool’s North America Region and maintain its headquarters in Mount Pleasant, Wisconsin.
- Whirlpool plans to initially fund the acquisition through available liquidity, with new debt in place later.
- WHR held $1.6 billion in cash and equivalents as of June 30, 2022.
- Price Action: WHR shares are trading lower by 1.75% at $165.52 and EMR lower by 0.35% at $90.07 on the last check Monday.
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