The sale price is adjusted for changes in working capital at closing, Meritor said in a press release. The company intends to finance the acquisition with a combination of cash and debt.
The acquisition enhances Meritor's growth platform, the company said, "bringing a highly complementary global product portfolio across the off-highway, defense, specialty and aftermarket segments."
AxleTech produces independent suspensions, axles, braking solutions and drivetrain components. AxleTech generated $248 million in revenue in calendar 2018, Meritor said.
Why It's Important
AxleTech was previously owned by Meritor before being sold in 2002, according to Automotive News.
"We are delighted to welcome AxleTech back to the Meritor family. The addition of AxleTech is a compelling value-creating opportunity to broaden our position in attractive, adjacent markets and advances our M2022 strategy," Jay Craig, Meritor's CEO and president, said in a statement.
Meritor said it expects to find more than $15 million in annual cost synergies by fiscal 2022 with the deal.
AxleTech will operate within Meritor's aftermarket, industrial and trailer segment, according to Wednesday's announcement.
Meritor said it expects the transaction to close in the fourth quarter contingent upon regulatory approval and closing conditions.
Meritor shares were trading down slightly at $22.46 at the time of publication Wednesday, while Carlyle Group shares were higher by 0.53 percent at $20.97.
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