Madison Air Solutions Expands Global Footprint With $5.4 Billion Purchase of ebm-papst
The scaling of the thermal management and ventilation technology across industrial infrastructure requires engineering expertise, significant manufacturing capabilities, and unique components.
Making a giant step forward, Chicago-headquartered Madison Air Solutions has signed an agreement to acquire ebm-papst, a German company producing fans and motors, with an enterprise value estimated at $5.4 billion.
Founded in 1963 in Mulfingen, Germany, ebm-papst is a leading manufacturer of electronically commutated (EC) fans and motor technology featuring more than 250 million fans used in critical HVAC and refrigeration systems in around 40 countries worldwide.
With the acquisition of the supplier, Madison Air Solutions plans to nearly double its total market addressable potential, from the current $15 billion to $30 billion, and expand its commercial and after-sales operations. In particular, the forecasts suggest that ebm-papst will generate about $2.8 billion in revenue and $343 million in adjusted EBITDA in 2026.
Managed by President and CEO Jill Wyant, Madison Air Solutions plans to finance the all-cash deal through the existing cash balances, borrowings, and equity. Debt commitments have been fully underwritten by UniCredit and Wells Fargo
$160 million worth of cost savings are projected in annualized run-rate for the third year, with the acquisition set to enhance the company’s EPS within the first year of completion. The acquisition showcases the increasing phenomenon in commercial real estate, data centers, and industrial manufacturing, with operators in these fields looking for ways to improve efficiency, reduce costs, and minimize carbon footprints.
By incorporating ebm-papst’s over 1,200 fan patents into the company’s existing portfolio, the level of vertical integration of the airflow technology supply chain is increased.
By consolidating critical components of mechanical parts, the manufacturer will be able to comply with growing environmental requirements and increasing cooling needs. When combining Madison Air’s wide systems distribution with ebm-papst’s motor engineering technology, the company obtains the best global platform for airflow technology.
