Knowles enters agreement to acquire Cornell Dubilier

Knowles Corp., a leading global supplier of high-performance components and solutions, including ceramic capacitors and radio frequency filters, advanced medtech microphones and balanced armature speakers and audio solutions, has entered into a definitive agreement to acquire Cornell Dubilier in an all-cash transaction.

In parallel, Knowles announced that it is evaluating strategic alternatives for its Consumer MEMS Microphones business (CMM).

Source: Cornell Dubilier

Cornell Dubilier, based in Liberty, South Carolina, is a technology leader and manufacturer of high-quality film, electrolytic and mica capacitors used in demanding medtech, military, aerospace, and industrial electrification applications with an annualized revenue of more than $135 million and over 35 thousand customers. The acquisition:

• Increases Exposure to High-Growth End Markets: The transaction significantly expands Knowles’ serviceable available market through Cornell Dubilier’s capacitor offerings. In addition, Cornell Dubilier’s end markets are aligned to key growth tailwinds, including increasing defense budgets, medical imaging and critical care application growth as well as industrial electrification and implementation of next generation fast charging architectures.

• Diversifies and Expands Product Portfolio: The combination of Cornell Dubilier’s broad selection of power film, electrolytic and mica capacitors with Knowles’ Precision Devices segment will deliver a compelling value proposition and wider portfolio of products and solutions to both existing and new customers.

• Drives Non-GAAP EPS Accretion and Preserves Financial Flexibility: Pro forma, the acquisition is expected to be accretive to Knowles’ non-GAAP EPS in 2024. Following the closing of the acquisition, Knowles expects to have a leverage ratio of 1.4x pro forma EBITDA and maintain its capital deployment strategy focused on balancing R&D and capex investment with accretive M&A while continuing to return cash to shareholders through share repurchases.

“Adding Cornell Dubilier’s impressive, broad-based roster of OEM and distribution partner customers, as well as its leading capabilities in capacitor technology will expand the applications for Knowles’ products,” said Knowles CEO Jeffrey Niew. “We will be well positioned to grow with new and existing customers as we work to generate stronger earnings and cash flow and create shareholder value. We admire the outstanding company and culture built by the Kaplan family over the past 40 years and we look forward to welcoming Cornell Dubilier’s talented employees to Knowles.”