St. Louis, MO, Nov. 7, 2007 — ESCO Technologies Inc. (ESCO) announced that it has signed a definitive stock purchase agreement to acquire Doble Engineering Co. (Doble) for $319 million in cash, subject to closing working capital adjustments. Doble, headquartered in Watertown, Massachusetts, is a provider of diagnostic test solutions for the electric utility industry.
The acquisition is being funded by a combination of ESCO’s existing cash and borrowings under a new $400 million credit facility led by National City Bank. At closing, the company’s leverage ratio (total debt-to-trailing-12-month pro-forma EBITDA) is expected to be less than 3.3x. The transaction is expected to close in the quarter ending December 31, 2007, and is subject to Hart-Scott-Rodino Act clearance.
Doble’s annual revenue has grown from approximately $46 million in 2001 to nearly $80 million for the trailing 12 months ended September 30, 2007, with EBITDA growing from approximately $12 million to nearly $28 million in the same period. The acquisition is expected to be accretive to ESCO’s earnings per share in fiscal 2008, excluding amortization of intangible assets.
Doble supplies diagnostic testing instruments for power delivery assets/apparatus and comprehensive engineering consulting services, which significantly enhance the value derived from using its test equipment. The combination of proprietary instrumentation products along with consulting services for analyzing and interpreting test data enables power system operators to make mission-critical decisions.
Doble will continue to be led by its existing and long-tenured management team, including Robert A. Smith, who has been Doble’s president and CEO since 2000. Doble will operate as a stand-alone subsidiary within ESCO’s Communications segment.
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