TE Connectivity's Bold Bid to Strengthen US Energy
TE Connectivity, a global leader in connectors and sensors, has announced the acquisition of Richards Manufacturing from funds managed by Oaktree Capital Management and members of the Bier family.
The deal strengthens TEās position in the North American electrical utilities sector by combining complementary product portfolios and adding Richardsā expertise.
It will enable the company to tap into strong growth trends in underground electrical networks and help strengthen US energy across the nation.
Strategic benefits of the acquisition
Richards Manufacturing is recognised as a leader in utility grid products, particularly in underground distribution equipment.
The company has seen consistent double-digit revenue growth in recent years. Based in Irvington, New Jersey, Richards holds a differentiated position in medium voltage cold-shrink cable accessories and network protector products.
The Richards management team will continue to lead the business post-acquisition, ensuring a smooth transition and continued growth.
The all-cash transaction is valued at approximately US$2.3bn, subject to customary adjustments. The deal will be financed through a combination of cash and additional debt. TE Connectivity expects mid-teens return on invested capital following the completion of the deal, including tax, revenue and cost synergies.
Once the acquisition is finalised, Richards will be integrated into TEās Industrial Solutions segment, contributing an estimated US$400m in annual sales and EBITDA margins in the mid-30% range.
"One of the key pillars of our strategy is investing in long-term secular growth trends that further our commitments to being a trusted partner to customers around the world and creating value for our owners," says TE Connectivity CEO Terrence Curtin.
"We have been strategically investing in our energy business over the past several years to be a growth driver for TE. We've benefited from our focus on utility scale renewables and grid reliability by providing our customers with innovative products required for the ongoing evolution of the energy grid.
"The acquisition of Richards Manufacturing aligns with our strategy and positions us to further capitalise on an accelerating grid replacement and upgrade cycle in North America, driven by aging infrastructure, the increased hardening of the network and the upgrades that are required to support the increase in energy demand.
"We look forward to building on the momentum of Richards' growth trajectory and welcoming their talented team to TE."
Future expansion & growth
The acquisition of Richards Manufacturing aligns with TE Connectivityās long-term strategy to expand its portfolio and strengthen its position in key industrial sectors.
By integrating Richardsā expertise and product offerings, TE is poised to drive further innovation in underground electrical networks and enhance its market leadership.
The combined capabilities of both companies are expected to result in continued growth and the ability to better serve the evolving needs of the electrical utility industry.
Together, both organisations will expand US energy manufacturing potential.
"We are thankful for the partnership, strategic support and resources that Oaktree brought to our firm," adds Joe Bier, CEO of Richards Manufacturing.
"Together, we have made significant investments in our facility, products, and team to serve our customers.
"We are thrilled for the next stage of our business as part of TE Connectivity. We've been working in the utilities market for nearly 80 years supporting the design, protection and life of critical infrastructure.
"We believe TE is a great home for the business our family has built and are excited for a bright future ahead for Richards in TE."
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