Here's a big deal
Monday, May 21, 2012 10:35 AM
Eaton Corp. agreed to buy Cooper Industries plc, a maker of electrical distribution equipment, in a transaction valued at $11.8 billion to expand its power management business and tap into the U.S. housing recovery, Bloomberg reported.
The acquisition is the largest in at least a decade in miscellaneous manufacturing, according to data compiled by Bloomberg.
Each Cooper share will be exchanged for $39.15 in cash and slightly more than three-quarters of an Eaton share, according to a statement today from Eaton, which is based in Cleveland.
The offer is valued at $72 a share based on Eaton's May 18 closing price, 29 percent more than Cooper's price that day, according to the statement.
Eaton's manufacturing portfolio includes electrical equipment, some of it used for residential construction, as well as hydraulic products and parts for trucks and automobiles. Cooper, which is based in the United Kingdom, gets 60 percent of its sales in the United States, Eaton said.
Eaton is paying about 14 times earnings before interest, taxes, depreciation and amortization for Cooper, which compares with the median of about 8 times paid in more than 100 similar takeovers since 2002.