DALLAS — CSW Industrials, Inc. has finalized its acquisition of Motors & Armatures Parts, a leading distributor of HVAC and refrigeration components, for approximately $650 million in cash, the company announced Tuesday.
The acquisition of MARS Parts significantly expands CSW’s product portfolio in the heating, ventilation, air conditioning and refrigeration market. The deal adds motors, capacitors and other electrical components used by professional tradespeople for repairs and replacements.
“We are pleased to have consummated the MARS Parts acquisition and to welcome approximately 200 new colleagues to the CSW Industrials family,” said Joseph B. Armes, chairman, president and CEO of CSW. He stated the move is expected to “further drive above-market growth” by diversifying the company’s HVAC/R offerings.
CSW funded the transaction with a $600 million syndicated term loan and borrowings from its revolving credit facility. The company stated it maintained sufficient liquidity and a strong balance sheet.
MARS Parts is one of the largest providers of HVAC/R parts and supplies in North America. CSW highlighted that MARS’s focus on repair parts will strategically complement its existing business, which has been more concentrated on new unit installations.
The cash purchase price represents 10.4 times the pro-forma trailing twelve-month EBITDA, adjusted for synergies. MARS Parts reported an estimated adjusted TTM EBITDA of $52.3 million.
The acquisition excludes the equipment segment of the former Motors & Armatures business.