Parker-Hannifin Corporation (NYSE:PH) shares fell 2.9% in premarket trading Tuesday after the company unveiled plans to acquire Filtration Group Corporation for $9.25 billion in cash, marking one of its largest deals to date.

The transaction, which remains subject to regulatory approval, is expected to close within six to twelve months. Parker said it will finance the purchase using a combination of cash on hand and new debt issuance. The deal values Filtration Group at 19.6 times its projected 2025 adjusted EBITDA, or 13.4 times when including anticipated cost synergies.

Filtration Group, a U.S.-based private company affiliated with Madison Industries, is expected to generate $2 billion in sales in 2025, with an adjusted EBITDA margin of 23.5%. The firm specializes in advanced filtration technologies used in critical industries, and about 85% of its sales come from the aftermarket segment, providing recurring revenue streams.

“This strategic transaction continues our investment in high quality businesses that continue to transform our portfolio, accelerate sales growth and improve profitability,” said Jenny Parmentier, Parker’s Chairman and CEO. “The acquisition will create one of the largest global industrial filtration businesses.”

Parker anticipates $220 million in pre-tax cost synergies by the end of the third year after closing and expects the transaction to be accretive to organic growth, EBITDA margin, adjusted EPS, and cash flow.

The acquisition will strengthen Parker’s footprint across Life Sciences, HVAC/R, and Industrial markets, while adding a range of complementary proprietary filtration technologies to its expanding portfolio.

Parker-Hannifin Corporation stock price

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