Takeover: Madison Air buys EBM-Papst for EUR 5.1 billion

Why is Madison Air acquiring EBM-Papst?

The U.S. group Madison Air is acquiring the EBM-Papst Group. As emerges from a statement by EBM-Papst, the shareholder families have signed a corresponding agreement for the transfer of their shares. As part of the transaction, EBM-Papst is being valued at an enterprise value of EUR 5.1 billion.

The three shareholder families see Madison Air as a new owner with a long-term orientation, which has innovative strength, operational scaling experience and a strong position in the U.S. market. This is intended to accelerate the growth course of the specialist for ventilation solutions for air, refrigeration and climate technology.

Through the acquisition, Madison Air in turn gains access to air technology and markets, especially in Europe. Until now, the U.S. group has generated by far the predominant part of its business in its home market of the USA.

What strengths do both companies bring?

Madison Air offers air quality solutions for mission-critical applications. The company serves various end markets, including healthcare, industrial high-performance manufacturing, clean rooms, data centers and residential buildings.

EBM-Papst complements this portfolio with ventilation and motor technology as well as engineering expertise. At the same time, Madison Air's operational expertise is intended to support EBM-Papst in further developing manufacturing, supply chains and commercial execution. In addition, EBM-Papst will in the future gain access to the US capital market.

The shareholder families justify their decision with the growth prospects of the combination. “After careful review, we jointly came to the conviction that Madison Air is the ideal partner for EBM-Papst to continue the growth course it has embarked on over the long term. Madison has been committed to sustainable corporate development for decades. The group has an impressive position in air and cooling technology as well as regionally in the USA, and the prospects in the areas of data centers and AI infrastructure are enormous. With Madison Air, we have found a new owner that brings the necessary financial strength, a long-term entrepreneurial horizon, impressive strength especially in the US market, and its own technical solutions in order to leverage EBM-Papst's potential in air, refrigeration and climate technology even more strongly in the future. We are firmly convinced that the employees and EBM-Papst as a whole will benefit from this step. That is clearly decisive for us,” explained Chloë McCracken, Jan Philippiak and Ralf Sturm on behalf of the shareholder families of EBM-Papst.

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Madison Air intends to strengthen EBM-Papst, which has more than 13,000 employees worldwide, including around 5,800 in Germany, over the long term and, according to the company, is prepared to make additional investments.

Jill Wyant, President and CEO of Madison Air, said: “As a long-standing customer of EBM-Papst, we greatly value the company’s integrated air technology and customized engineering expertise. Together with our strengths in mission-critical applications, our customer relationships and our market access, we see clear potential to serve our customers even better and drive innovation forward. The capable team and engineering expertise of EBM-Papst make the company a natural partner for Madison Air. We are convinced that together we can build on the already strong foundation. We would especially like to express our respect for the owner families of EBM-Papst, the company’s decades-long history, the employees, and the corporate culture. We want to continue this legacy through continuous investment in the workforce, the technology and long-term growth.”

What does the takeover mean for the Mulfingen site?

Mulfingen will remain the headquarters of the EBM-Papst Group as well as an important research, development, and production site. According to the statement, the transaction has no effects on existing labor-law obligations, collectively agreed regulations, and works agreements.

Larry Gies, chairman of the Board of Directors and founder of Madison Air, also emphasizes the long-term perspective: “We have been industrial owners for more than three decades and know what makes a really good company. EBM-Papst is definitely one of them. The culture and the heritage that the shareholder families have built in Mulfingen and beyond are among the group's greatest strengths, and we will preserve both. Demand for high-quality refrigeration technology is growing rapidly worldwide, and EBM-Papst has the know-how and the capacities that the market needs today. The two companies complement each other ideally in their regional strengths: EBM-Papst with its position in Europe and an attractive business in Asia, while we have our presence in North America. We look forward to growing together with the EBM-Papst management team - for the benefit of the employees and the group as a whole.”

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EBM-Papst expects better access to the US market

For the management of EBM-Papst, the stronger positioning in the USA in particular plays a role. “EBM-Papst is stronger today than ever before,” said Dr. Klaus Geißdörfer, CEO of EBM-Papst. “Thanks to our strategic orientation, we are on a growth course, our innovative core business Air Technology is growing strongly, and the data center business is developing extraordinarily dynamically. However, the great potential for the further development of the group has not been exhausted, and with Madison we have found a partner who understands exactly what makes EBM-Papst what it is and what we need to further expand our market leadership. We will also benefit from better access to the US market.”

The two companies point in particular to data centers and AI infrastructure. The expansion of digital infrastructures and advances in artificial intelligence are leading, according to the statement, to a growing need for highly efficient and scalable cooling solutions.

EBM-Papst sees itself as aligned with growth drivers such as data centers, AI infrastructure, electrification, energy efficiency as well as sustainable heating and cooling solutions. The AI-based platform NEXAIRA connects physical products and digital applications and, according to the company, enables needs-based control, predictive maintenance and a significant reduction in energy consumption in data centers.

When is the acquisition of EBM-Papst expected to be completed?

The transaction is still subject to regulatory approvals and the usual closing conditions. Closing is expected toward the end of 2026.

The shareholder families were supported in the transaction by Milbank LLP as legal adviser and Goldman Sachs Bank Europe SE as financial adviser.

With material from EBM-Papst