Acacia Research Corporation has recently acquired Deflecto Acquisition, Inc. for $103.7 million. Deflecto, a leading specialty manufacturer of essential products serving the commercial transportation, HVAC, and office markets, is expected to generate approximately $128-$136 million in revenue in 2024. In the trailing twelve-month period ended August 31, 2024, Deflecto generated revenue of approximately $131 million.
The transaction is anticipated to be immediately accretive to free cash flow and earnings per share for Acacia. Martin (“MJ”) D. McNulty, Jr., Acacia’s CEO, expressed satisfaction with the acquisition, emphasizing Deflecto’s fit in their target size range, diverse product offerings, and strong management team. He highlighted the potential for attractive near and long-term value creation opportunities through product and operational optimization, as well as strategic M&A.
Ross Pliska, Deflecto’s CEO, also expressed enthusiasm about the transaction and highlighted the efforts made since 2021 to enhance Deflecto’s financial and operational performance across the business.
The transaction was funded using cash on hand and borrowings under a new senior secured credit facility guaranteed by certain subsidiaries of Deflecto. Following the distribution of the transaction proceeds, Deflecto will have approximately $48 million outstanding under the facility and $10 million of cash on hand. Following these announcements, the company's shares moved 1.4%, and are now trading at a price of $4.79. Check out the company's full 8-K submission here.
