Dublin — Power management company Eaton Corp. has agreed to sell its Hydraulics business to a Denmark’s Danfoss A/S, for $3.3 billion (€3 billion) in cash, the company announced 21 Jan.
The Hydraulics business, which makes hydraulics components, systems and services for industrial and mobile equipment, had sales of $2.2 billion in 2019.
Among others, the unit manufactures a hydraulic hoses and hose fittings for a variety of applications.
The business employs about 11,000 people.
Dublin, Ireland-based Eaton said in a news release that the sale price of the Hydraulics business "represents a 13.2 multiple of 2019 EBITDA."
The transaction, subject to customary closing conditions and regulatory approvals, is expected to close by the end of the year.
Eaton also noted it will retain its Filtration and Golf Grip businesses, which are reported in the company's Hydraulics segment.
Craig Arnold, Eaton's chairman and CEO, said the deal was part of the ongoing transformation of Eaton into a higher-growth company with better earnings consistency.
“We believe this transaction will create substantial value for our shareholders and allow our hydraulics employees to be part of a company that has a strong commitment to the hydraulics industry," he added.
Earlier this month, Eaton disclosed the sale of its Automotive Fluid Conveyance Division to private equity firm Quantum Capital Partners. Terms of that transaction were not disclosed.
The division, part of Eaton's Vehicle Group, had sales of about $150 million in 2018.
Eaton unveiled plans to sell the division last March, saying it wanted to focus on higher-growth segments of the Vehicle Group business.
With reported sales of $21.6 billion in 2018, Eaton has about 101,000 employees and sells products to customers in more than 175 countries.