Graham Acquires FlackTek for $35M, Expands into Advanced Materials Processing

summarizeSummary

Graham Corporation acquired FlackTek for $35 million upfront, adding advanced mixing and material processing as a new core platform and increasing its revolving credit facility to $80 million to support growth.

check_boxKey Events

• Strategic Acquisition Completed

  Graham Corporation acquired FlackTek Manufacturing, LLC and FlackTek Sales, LLC for an upfront purchase price of $35 million, consisting of 85% cash and 15% in Graham common stock (75,818 shares). The deal includes a potential earnout of an additional $25 million over four years based on performance targets.

• New Core Platform Established

  The acquisition establishes advanced mixing and material processing as a third core platform, complementing Graham's existing vacuum, heat transfer, and turbomachinery technologies. This expands the company's offerings across Defense, Energy & Process, and Space markets, and introduces new sub-markets like battery and semiconductor.

• Credit Facility Expanded

  In connection with the acquisition, Graham amended its credit agreement with Wells Fargo, increasing its revolving credit limit from $50.0 million to $80.0 million. This provides enhanced financial flexibility and liquidity to support the acquisition and future growth initiatives, with a pro forma leverage ratio of approximately 1.2x.

auto_awesomeAnalysis

Graham Corporation's acquisition of FlackTek is a significant strategic move, establishing a third core platform in advanced mixing and material processing. This expands the company's mission-critical engineered products portfolio, leveraging existing end markets like Defense, Energy & Process, and Space, while also opening new sub-markets such as battery and semiconductor. The $35 million upfront purchase, with a potential $25 million earnout, is a material investment for Graham. The concurrent increase in the revolving credit facility to $80 million provides ample financial flexibility to fund the cash portion of the acquisition and support future growth initiatives, maintaining a manageable pro forma leverage ratio of approximately 1.2x. This acquisition is expected to enhance long-term growth through disruptive technology and recurring revenue streams from consumables and aftermarket opportunities.