Circor Rallies after Acquisition by KKR for $1.7 Billion

Circor International (NYSE: CIR) rallied in pre-market trading at the time of publishing on Tuesday after the provider of mission-critical flow control products and services for the aerospace & defense markets announced that it has accepted a revised proposal from affiliates of investment funds managed by KKR. KKR will acquire Circor at an increased price of $51 per share instead of the prior price of $49 per share in cash. This all-cash deal is valued at $1.7 billion, including the assumption of debt.

The acquisition is expected to close later this year and Circor stated in its press release that KKR had agreed to “provide a full equity backstop for the consummation of the merger,” and had also agreed to a reverse termination fee of $125 million payable to Circor in case the merger is not completed. KKR agreed to raise the existing customary reverse termination fee related to closing obligations from $67 million to $100 million. On Circor’s part, the company will pay KKR a revised termination fee of $42.75 million as compared to a prior termination fee of $28 million.

The revised deal was executed after Circor received an unsolicited proposal from a third party to acquire all of the company’s outstanding shares for $52.65 per share in cash.

CIR stock has soared by more than 90% in the past six months.