Madison Air to acquire ebm-papst in $5.4 billion deal

Madison Air Solutions Corp has announced a $2.25 billion private placement of Class A shares to finance the acquisition of ebm-papst Mulfingen GmbH & Co. KG. The total transaction value for the German specialist in air and drive technology is estimated at $5.4 billion, which Madison Air notes effectively reduces to $5.0 billion when accounting for future tax savings.

The acquisition is a strategic move intended to establish Madison Air as a leader in the data center cooling market. Following the agreement, the three shareholder families of ebm-papst will transfer their interests to the US-based corporation. The company's headquarters are expected to remain in Mulfingen, Germany.

To stabilize the market following the issuance of approximately 90 million new shares, investors including Larry Gies and Madison Solutions have entered into one-year lock-up agreements. The share placement is expected to close on September 1.