Parker Hannifin to buy Filtration Group for $9.25 billion (updated)

Parker-Hannifin

11/11/2025 12:41

Adds comment from financial advisor in paragraph 5, background in paragraph 6; updates share movement in paragraph 12

By Aishwarya Jain

Nov 11 (Reuters) - Parker Hannifin PH.N said on Tuesday it would buy air and liquid filtration systems maker Filtration Group from privately held Madison Industries for $9.25 billion, as it seeks to expand its presence in the aftermarket business.

The aftermarket refers to sales of replacement parts and maintenance products after the original equipment has been sold, providing recurring revenue streams for industrial suppliers seeking stable, higher-margin income.

Filtration Group, which caters to industrial and the heating and cooling systems markets, generates about 85% of its sales in the aftermarket and expects 2025 sales of $2  billion.

Parker's filtration and engineered materials segment led its businesses in fiscal 2025, generating $5.81 billion and 42.5% of total sales.

Filtration, separation, and water sectors are attracting strong investor interest amid rising demand for cleaner air and water, according to Bobby Reifman, Lincoln International's Managing Director and Co-Head of Industrials, who served as financial advisor on the deal.

Last month, American Water Works AWK.N announced plans to acquire Essential Utilities, to create a combined company valued at $63 billion as it cemented its status as the country's top water utility.

"Parker has delivered outsized returns in past deals even on headline prices that don't appear particularly cheap," said Scott Davis, analyst at Melius Research, adding the deal boosts Parker's presence in the life sciences and heating, ventilation and cooling market.

The deal will be financed with new debt and cash on hand and is expected to close within six to twelve months, Parker said.

The purchase price represents 19.6x of Filtration Group's estimated adjusted core profit for 2025, or 13.4x including expected cost synergies.

Parker estimates pre-tax cost synergies of approximately $220 million by the end of year three after closing.

By five years, it is expected to add to Parker's organic growth, margins and adjusted earnings, and generate a high-single-digit return on invested capital.

Shares of Parker Hannifin rose 1.7% on Tuesday.

 (Reporting by Aishwarya Jain in Bengaluru; Editing by Krishna Chandra Eluri)

 ((Aishwarya.Jain@thomsonreuters.com;))