Jun 28, 2023 - Economy

Circor buyout battle reveals private equity's new normal

Dan Primack

Illustration of two faucets, one dry and one with hundred dollar bills coming out of it. — Illustration: Brendan Lynch/Axios

Arcline Investment Management has offered $57 per share to acquire Circor, a Burlington, Mass.-based maker of industrial flow control products that previously agreed to a sweetened $51 per share bid from KKR.

Why it matters: For more than a decade, private equity firms shied away from making rival bids once targets had picked their partners. Arcline's move is part of a burgeoning new normal.

Details: KKR originally agreed to buy Circor for $49 per share, representing a 55% price premium and a total deal value of $1.6 billion (including debt). Then, earlier this week, it upped its bid to $51 after Arcline quietly submitted an unsolicited $52.65 per share offer.

Arcline's new bid would represent around an 80% premium to Circor's stock price prior to KKR's original agreement, for a total deal value of around $1.76 billion.

The bottom line: Arcline has set a deadline for 8pm on Thursday night for Circor's board, which just 24 hours ago said it was sticking with KKR because of financing certainty (e.g., full equity backstop) and a clearer regulatory path. But that was before Arcline significantly raised the ante.

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Circor buyout battle reveals private equity's new normal

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