Recently, Parker Hannifin Corporation (PH) completed the tender offer to purchase the outstanding shares in its Japanese subsidiary, TAIYO, LTD. Since June 2006, Parker is holding 56.49% shares in TAIYO, which is based in Osaka, Japan. The tender offer made by Parker Hannifin Japan Holdings GK increases the company’s holding in TAIYO to 97.82%.
The purchase price per share has been fixed at 250 yen (approximately $3.08). Parker paid a total consideration of 5.5 billion yen (approximately $70 million) for the tendered shares.
Annual revenue generation of TAIYO is about 17.3 billion yen (approximately $215 million). Parker’s Global Hydraulics Group continues to include TAIYO, manufacturer of a wide range of motion and control products. Parker’s financial statement includes 100% of TAIYO’s sales.
With the completion of the transaction, Parker will strengthen its position as a provider of class hydraulic and automation systems in Japan. The company will also develop its position in other markets in the region.
Parker-Hannifin Corporation is a leading worldwide full-line diversified manufacturer of motion and control technologies and systems, including fluid power systems, electromechanical controls and related components. In addition to motion and control products, the company is also a leading worldwide producer of fluid purification, fluid and fuel control, process instrumentation, air conditioning, refrigeration, electromagnetic shielding and thermal management products and systems.
We continue to maintain a Neutral rating on Parker-Hannifin for the long term. The company has a Zacks #4 Rank (Sell recommendation) over the next one-to-three months.
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