Enerpac Bets $472 Million on Industrial Expansion
The company will acquire SFE Group for 10.6 times trailing adjusted EBITDA, lifting its addressable market by $1 billion.
The industrial-tools manufacturer Enerpac Tool Group (EPAC) agreed to acquire SFE Group for $472 million in cash, marking its largest purchase to date and a sharp pivot toward higher-margin automation and flow-control products. The deal values SFE at 10.6 times trailing-twelve-month adjusted EBITDA, or 9.5 times after anticipated synergies.
The acquisition introduces a new growth vector for Enerpac, whose core hydraulic-tools business has faced uneven demand from energy and infrastructure markets. SFE generated approximately $170 million in trailing sales and $44 million in adjusted EBITDA, expanding Enerpac’s total addressable market by roughly $1 billion. Management expects the transaction to lift fiscal 2027 adjusted earnings per share, though it did not quantify the accretion.
To fund the purchase, Enerpac amended its senior credit facility, raising the revolving credit line from $400 million to $625 million. Net debt-to-adjusted EBITDA is projected to climb to 2.8 times upon closing, up from 1.2 times at the end of the prior fiscal year. The company said the leverage remains within its targeted range and will decline as synergies materialize.
The deal is slated to close in the first quarter of fiscal 2027, pending regulatory approvals. Enerpac did not provide updated guidance for the current fiscal year, citing the pending transaction as a near-term priority. The company’s shares rose 3.2% in after-hours trading following the announcement.
SFE’s portfolio includes high-pressure valves and control systems used in oil and gas, power generation, and industrial processing. Enerpac said the acquisition will diversify its revenue base and reduce exposure to cyclical construction markets. The company also noted that SFE’s aftermarket service business carries margins above its corporate average.
Enerpac expects to realize cost synergies through shared manufacturing and distribution networks, though it did not disclose a specific target. The company said it will maintain SFE’s existing operations and leadership team post-close.
The transaction marks Enerpac’s second major acquisition in three years, following the 2023 purchase of Simplex, a provider of hydraulic bolting tools. That deal, valued at $110 million, expanded Enerpac’s presence in the wind-energy sector.