• Business Services & Industrial
  • Mergers & Acquisitions
  • Public & Global Corporations

A Win-Win Divestiture for Both the Parent Corporation and Management

Company Background

A diversified industrial products company seeks strategic options for a non-core business

IDEX Corporation is an applied solutions company specializing in fluid and metering technologies, health and science technologies, and fire, safety, and other diversified products with over $2 billion in annual revenue and operations in 20 countries.

 

IDEX Corporation had had a 20+ year relationship with Republic Partners when they reached out to discuss strategic options for a non-core business that manufactures and sells specialty water valves, Hydra-Stop Valves. IDEX was interested in selling the business to a third party or to management, if a third-party sale process was not successful.

135

Potential buyers contacted

22

Non-binding indications of interest received

4

Final offers received

The Challenge

A divestiture with complex factors

The challenges included establishing a market valuation for the business whose value would increase because of a new product launch, developing an efficient process to confirm valuation so that IDEX’s leadership could decide to sell to a third party or to proceed with a management buyout, and working with a management team that, while talented and energetic, had limited M&A transaction experience.

Republic Partners' Role

We educate management and involve them in every step of the process

Republic educated and worked with the management team on the M&A process, sought their views on potential buyers, and maintained constant communications to ensure that they were informed and engaged. Republic also worked with management to quantify the potential benefit of the new product launch on valuation and developed a timeline for the M&A process that took into consideration the key milestones for the launch.

Analyses indicate that a broad process best-serves the shareholders and management

Based on an in-depth analysis of Hydra-Stop Valves and the potential demand for the business in the M&A market, Republic recommended a broad process that involved strategic and financial buyers.  IDEX agreed that if the broad process to sell Hydra-Stop to a third party failed to achieve its targeted valuation, Republic would work with management to purchase the business from IDEX and obtain financing.

Results

The broad process generates multiple offers

Republic developed a close and constructive working relationship with the management team throughout the process which led to the Company receiving multiple attractive offers for the business. In August 2016, IDEX successfully sold Hydra-Stop Valves to Madison Industries.