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Nelson makes offer for Donaldson exhaust and emissions business

25 February 2020

Nelson Global Products Inc. of Stoughton, WI—a global supplier of mufflers, exhaust systems, and other auto paerts—signed a binding offer to purchase Donaldson Company’s Exhaust and Emissions (E&E) business. The financial terms were not disclosed.

Donaldson said it will engage in a consultation with its employee representative committees in Europe. Following completion of the consultation process, Donaldson will have the right to enter into a purchase agreement with Nelson, pursuant to a put option agreement.

Donaldson’s E&E business contributed approximately $120 million of revenue to the Engine Products segment in fiscal 2019. The transaction would include Donaldson’s dedicated E&E sales and engineering functions, production facilities and lab capabilities. Pending the consultation process, the parties’ entry into the purchase agreement and satisfaction of closing conditions and necessary approvals, the transaction is expected to close in Donaldson’s third quarter of fiscal 2020, the company said.

“We have a disciplined approach to managing our portfolio of filtration businesses, and the potential divestiture of Exhaust and Emissions reflects our commitment to pursuing opportunities where we believe we offer a distinct competitive advantage,” said Tod Carpenter, chairman, president and chief executive officer of Donaldson Company. “Consistent with our history of innovation, Frank Donaldson invented the first spark-arresting muffler in the 1920s. In recent years, the technical and manufacturing competencies required to support the E&E business have evolved. We believe that Nelson, a global leader in the design and manufacture of thermal management, acoustic, air and fluid mechanics, and structural solutions, will provide E&E customers and employees a greater level of support. As we consider this transaction against our long-term opportunities, we expect the divestiture would create value for all stakeholders.”

Donaldson’s E&E business includes manufacturing facilities in Auburn, Alabama, Domjean, France, and Conde-sur-Noireau, France, and laboratory facilities in Bloomington, Minnesota and Leuven, Belgium.

Nelson Global Products, owned by a Chicago-based private equity group Wind Point Partners, has over 2,800 employees and 16 manufacturing facilities in the United States (6), India (4), Mexico (2), Brazil (2), China (1), and Australia (1). Two additional manufacturing facilities are scheduled to open in India in Q2 2020.

Source: Nelson Global Products | Donaldson Company