The all-cash deal has been unanimously approved by the board of directors of both companies. CLARCOR’s $83.00 fetching price represents a 17.8% premium over the stock’s Wednesday closing price of $70.45.
Cleveland-based Parker Hannifin, which provides motion and control technologies to various industries, “expects to realize annual run rate cost synergies of approximately $140 million three years after closing” the deal. Parker commented via press release:
“This strategic transaction is consistent with our stated objective to invest in businesses that accelerate Parker towards our goal of top quartile financial performance,” said Tom Williams, Chairman and Chief Executive Officer of Parker. “The combination of Parker and CLARCOR is highly complementary and offers a great opportunity to combine our strength in international markets and OEMs with CLARCOR’s strong U.S. presence and high percentage of recurring sales in the aftermarket.”
CLARCOR shares rose $10.55 (+14.98%) to $81.00 in premarket trading Thursday. Prior to today’s news, CLC had already surged 41.81%, which is about five times the return of the S&P 500 during the same period. Parker-Hannifin shares were inactive in the premarket, but have also posted massive gains of 43.26% this year.