ITT to Acquire SPX FLOW in $4.8 Billion Deal to Boost Industrials
The acquisition from private equity firm Lone Star Funds is set to expand ITT's presence in the flow technology sector and is expected to be immediately accretive to margins.
STAMFORD, Conn. – ITT Inc. (NYSE: ITT) has entered into a definitive agreement to acquire SPX FLOW, a manufacturer of process technologies, from private equity firm Lone Star Funds in a deal valued at approximately $4.775 billion. The move significantly scales ITT’s industrial manufacturing capabilities and strengthens its position in the highly competitive flow technology market.
The transaction, announced Friday, will see ITT pay $4.075 billion in cash alongside the issuance of 3.84 million shares of its common stock. The acquisition is one of the largest in the company's recent history, representing a significant portion of ITT's roughly $14.1 billion market capitalization.
This strategic purchase is designed to bolster ITT’s Industrial Process (IP) segment. SPX FLOW, headquartered in Charlotte, North Carolina, is a key supplier of engineered equipment for the nutrition, health, and industrial sectors, reporting approximately $1.3 billion in sales over the last twelve months. Its integration is expected to create a more comprehensive portfolio for ITT, particularly in high-growth areas like pharmaceuticals and food and beverage processing.
The acquisition reflects a clear strategy by ITT's leadership to accelerate growth through large-scale, synergistic acquisitions. The company stated that the deal will provide customers with a more extensive range of products and services while creating a powerful platform for future innovation.
Financially, ITT projects the acquisition will be immediately accretive to its gross margin and adjusted EBITDA margin. The company anticipates adjusted earnings-per-share accretion in 2026, with a jump to double-digit accretion in the first full year after closing, excluding intangible amortization. Furthermore, ITT is targeting an $80 million run-rate of cost synergies by the end of the third year post-acquisition.
The valuation of the deal stands at 14.2 times SPX FLOW’s forecasted full-year 2026 adjusted EBITDA. This multiple is reduced to 11.5 times when factoring in the projected cost synergies, according to company statements. ITT plans to finance the cash portion of the deal with new debt, while aiming to maintain an investment-grade credit rating. The company intends to reduce its net leverage ratio to below 2.0x within 18 months of the transaction's close.
Wall Street has responded favorably to the strategic move. In morning trading following the announcement, shares of ITT rose over 1.5%. The broader market sentiment is reflected in analyst ratings, with ITT holding a "Strong Buy" consensus from a majority of analysts covering the stock, according to market data. The average price target sits near $201, suggesting further upside potential.
The transaction is subject to customary closing conditions and regulatory approvals, with both companies expecting the deal to be finalized by the end of the first quarter of 2026. Upon completion, SPX FLOW will be integrated into ITT's Industrial Process segment, a move that is expected to reshape the competitive landscape for specialized industrial components and systems.