TE Connectivity has entered into a definitive agreement to acquire Richards Manufacturing Co. from funds managed by Oaktree Capital Management, L.P. and members of the Bier family, long-standing owners and leaders of the business. The transaction will strengthen TE’s position in serving electrical utilities in North America by combining complementary product portfolios and adding the expertise of the Richards team, enabling TE to benefit from strong growth trends in underground electrical networks.
Richards is a provider of utility grid products and, over the last several years, has experienced double-digit revenue growth. The company, headquartered in Irvington, N.J., is a leader in underground distribution equipment, with differentiated positions in both medium voltage cold-shrink cable accessories and network protector products. The Richards management team is committed to TE and will continue to lead the business post-closing.
“We have been strategically investing in our energy business over the past several years to be a growth driver for TE. We have benefited from our focus on utility scale renewables and grid reliability by providing our customers with innovative products required for the ongoing evolution of the energy grid,” said TE Connectivity CEO Terrence Curtin. “The acquisition of Richards Manufacturing aligns with our strategy and positions us to further capitalize on an accelerating grid replacement and upgrade cycle in North America, driven by aging infrastructure, the increased hardening of the network, and the upgrades that are required to support the increase in energy demand. We look forward to building on the momentum of Richards’ growth trajectory and welcoming their talented team to TE.”
Joe Bier, CEO of Richards Manufacturing, said, “We are thankful for the partnership, strategic support and resources that Oaktree brought to our firm. Together, we have made significant investments in our facility, products, and team to serve our customers. We are thrilled for the next stage of our business as part of TE Connectivity. We have been working in the utilities market for nearly 80 years supporting the design, protection, and life of critical infrastructure. We believe TE is a great home for the business our family has built and are excited for a bright future ahead for Richards in TE.”
Ulysses Fowler, Managing Director of Oaktree’s Power Opportunities Group said, “Oaktree is proud to have supported Richards through a transformative phase of development. We thank Joe, the Bier family, the entire management team, and all of Richards’ employees for their dedication to developing and delivering an innovative and high-quality product portfolio while maintaining a total commitment to quality, responsiveness, and customer service. All of us at Oaktree wish the team at Richards continued success as part of TE.”
The all-cash transaction is valued at approximately USD 2.3 billion, subject to customary post-closing adjustments. The transaction will be financed through cash and additional debt. Upon completion of the transaction, the acquired business will be reported as part of TE’s Industrial Solutions segment and is expected to contribute annual sales of approximately USD 400 million and EBITDA margins in the mid-30 percent range. This acquisition is expected to be accretive to TE’s sales growth and adjusted operating margins.