• Strategically expands severe service flow control offering in attractive mining, mineral extraction and process industries
• Highly complementary product and service offering with large installed base that meaningfully enhances Flowserve’s aftermarket opportunity
• Attractive upfront purchase multiple of approximately 7.5x MOGAS’ 2024E adjusted EBITDA which is expected to reduce further with synergy realization
• Transaction expected to be adjusted Earnings Per Share (EPS) accretive in the first full year following close

DALLAS–(BUSINESS WIRE)– Flowserve Corporation (“Flowserve”) (NYSE: FLS), a leading provider of flow control products and services for the global infrastructure markets, announced today that it has signed a definitive agreement (the “Agreement”) to acquire MOGAS Industries (“MOGAS”), a privately held, Houston-based provider of mission-critical severe service valves and associated aftermarket services for $290 million with a potential $15 million earnout (the “Transaction”). The Transaction is expected to close in the fourth quarter of 2024.

Founded in 1973, MOGAS was established by V. Louis Mogas with the purchase of a small machine shop. Today, MOGAS is a leading manufacturer of severe service isolation valves for a variety of end-markets, including mining, power and process industries through its state-of-the-art manufacturing facility in Houston. MOGAS has established sales and service offices in Australia, China, Europe, Canada, South America, the Middle East and India, countries which are highly complementary to Flowserve’s served geographies.

MOGAS’ differentiated valve products are expected to enhance Flowserve’s installed base, creating meaningful aftermarket opportunities. Upon completion of the Transaction, MOGAS will be integrated into Flowserve’s Flow Control Division (FCD) segment, building upon Flowserve’s comprehensive valve and automation portfolio with the addition of MOGAS’ strong brand, heritage, and technical expertise in diverse and attractive end markets. Flowserve anticipates customers of both companies will significantly benefit from the newly combined product portfolios in the growing mining industry.

“MOGAS is highly complementary to Flowserve’s current valve portfolio and further advances our 3D growth strategy by roughly doubling our direct mining and mineral extraction exposure and driving further diversification. The combination creates technically differentiated scale in severe service flow control with significant aftermarket contribution,” said Scott Rowe, Flowserve’s President and Chief Executive Officer. “This acquisition meets our disciplined financial criteria and positions us to enhance value for all our shareholders, customers and associates. We are excited to welcome the MOGAS team to Flowserve.”

Matt Mogas, President and Chief Executive Officer of MOGAS, commented, “There is no better cultural and strategic fit for our family’s 50-year-old business than joining with Flowserve, a company that shares our unwavering commitment to customers, people, and products. Our employees, who are at the heart of our success, will benefit from the alignment of values and opportunities for growth within a larger organization.”

Transaction Details and Approvals

The Transaction includes an upfront purchase price of $290 million of cash consideration with an additional earnout of up to $15 million tied to the achievement of certain minimum levels of adjusted EBITDA of the MOGAS business for the calendar year ended December 31, 2024. When adjusted for approximately $15 million of expected tax benefits, the upfront purchase price represents a purchase multiple of approximately 7.5x MOGAS’ 2024E adjusted EBITDA.

The Transaction is expected to be accretive to Flowserve’s adjusted EPS in the first full year following closing. MOGAS expects to contribute revenues of approximately $200 million with adjusted EBITDA margins in the high teens.

The additional scale, footprint consolidation and procurement opportunities provided by the combination provide clear visibility to at least $15 million of run-rate cost synergies within two years after closing of the Transaction. Further, the Transaction is expected to increase Flowserve’s aftermarket potential and provide the opportunity for revenue growth synergies as well.

Flowserve expects to fund the upfront cash consideration through a combination of cash and available debt financing. The Transaction is subject to the satisfaction of customary closing conditions and regulatory approvals.

Advisors

Jefferies is serving as financial advisor and Baker McKenzie is serving as legal advisor to Flowserve. Baird is serving as financial advisor and Foley & Lardner is serving as legal advisor to MOGAS.

About Flowserve

Flowserve Corp. is one of the world’s leading providers of fluid motion and control products and services. Operating in more than 50 countries, Flowserve produces engineered and industrial pumps, seals and valves as well as a range of related flow management services. More information about Flowserve can be obtained by visiting Flowserve’s Web site at www.flowserve.com .