Valmont Industries Inc VMI has entered into a definitive agreement to acquire HR Products, a wholesale supplier of irrigation parts in Australia, for an undisclosed sum.
The acquisition will expand the company's geographic footprint and grow its parts presence in a key agriculture market.
HR Products provides a broad range of irrigation products to serve the agriculture and landscaping industries. It has nearly 100 employees and six warehouse facilities.
The company expects the deal to be immediately accretive to earnings, with Year 1 revenue of about $45 million.
The transaction is expected to close in the third quarter of 2023.
"Due to the long life cycle of irrigation equipment, there is a substantial market to replace wearable parts," said Joshua Dixon, President of Global Irrigation.
"This acquisition positions us very well to meet this demand, leveraging our existing Valley® dealer network for distribution and service, and large installed machine base in the region to grow recurring, high-value revenue streams and help lessen the cyclicality in our agriculture business."
Valmont plans to fund the transaction with cash on hand. It held $172.9 million in cash and equivalents as of April 1, 2023.
Price Action: VMI shares are trading higher by 1.25% at $286.53 on the last check Friday.
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