Flowserve Corporation announced it has entered into a conditional sale and purchase agreement to sell its Gestra AG business unit to Spirax-Sarco Engineering plc for an Enterprise Value of €186 million.
In addition to the product s core manufacturing facilities in Bremen, Germany, the sale also includes several other smaller associated businesses supporting Gestra products.
Source: Flowserve Corporation
The sale is part of an ongoing effort by Flowserve to better align and optimize its product portfolio and manufacturing footprint, focusing on core business objectives that will allow the company to be more competitive when key industry markets return.
"Our decision to divest the Gestra AG product line is consistent with our ongoing efforts to drive long-term shareholder value," said John Lenander, President, Flowserve Flow Control Division. "While Gestra has been a solid business unit for Flowserve, we believe it is highly complementary to a company like Spirax that has the intent to expand the customer base, invest in the organic business and fully utilize the infrastructure already in place. We are pleased to see our Gestra team members integrated into an industry-leading, steam-focused business like Spirax."
Flowserve obtained Gestra AG in 2002 as part of the acquisition of Invensys Flow Control. In 2016, the Gestra business recorded revenues of approximately €92.5 million with earnings before interest and taxes of €15.2 million, and its gross assets at year end 2016 were approximately €67 million. The transaction is expected to be completed during the second quarter of 2017, subject to certain customary conditions, including regulatory approval of the transaction by the German authorities.