Acacia Research Corporation acquired Deflecto for $103.7 million, the companies announced Monday.
Deflecto is a leading specialty manufacturer of products for commercial transportation, HVAC and office markets. Acacia is a publicly traded company that acquires and operates businesses in the mature technology, energy and manufacturing sectors. Deflecto, headquartered in Indianapolis, will continue to be led by Ross Pilska, CEO, and the existing management team.
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"The transaction with Acacia is a seamless fit and the culmination of Deflecto's efforts since 2021 to significantly improve Deflecto's financial and operational performance across the business," Pilska says. "Acacia's experienced management team has a history of successfully integrating acquisitions and offers industry expertise, additional capital for future investments and immediate value creation."
Deflecto's products include emergency warning triangles and mudguards, as well as airducts and air registers, sign holders and floormats. It has nine manufacturing facilities in the U.S., Canada, the United Kingdom and China. In the trailing 12-month period ending Aug. 31, the company generated $131 million in revenue. Acacia expects Deflecto to generate $128-$136 million in 2024.
"We are pleased to add Deflecto to Acacia's growing portfolio of strategic assets," says Martin "MJ" D. McNulty Jr., Acacia's CEO. "This acquisition is consistent with the types of opportunities we look for. Deflecto fits in our target size range, sells diversified and necessary goods and has an excellent management team, led by Ross, with a demonstrated track record of operational execution and capital allocation."
The transaction was funded with cash on hand and borrowing under a new senior secured credit facility guaranteed by subsidiaries of Deflecto. Following distribution of the transaction's proceeds, Deflecto will have $48 million outstanding under the facility and $10 million cash on hand.