How much is TE Connectivity paying for Richards Manufacturing, and how will it be financed?

TE is paying an aggregate consideration of approximately $2.3 billion in all cash, subject to customary post-closing adjustments. The purchase is expected to be funded through a combination of cash on hand and new permanent debt obtained before closing.

What does Richards Manufacturing contribute to TE's financials?

Management expects Richards to generate approximately $400 million in annual sales with EBITDA margins in the mid-30% range. The business has experienced double-digit revenue growth in recent years. It will be reported within TE's Industrial Solutions segment and is expected to be accretive to TE's and the segment's sales growth and adjusted operating margins.

What is the expected earnings impact and return profile of the deal?

TE expects roughly $0.10 of accretion to adjusted EPS in the first full year, including financing costs and excluding acquisition and amortization-related expenses. Management expects a mid-teens return on invested capital upon completion of tax, revenue and cost synergies, which it projects in roughly year five.

What could prevent or delay the deal from closing?

Closing is conditioned on expiration or termination of the HSR Act waiting period, continued accuracy of representations and warranties (subject to materiality standards), no material adverse effect on Relay, and no court or governmental order prohibiting the transaction. The agreement can be terminated if closing has not occurred by June 11, 2025, which extends automatically to December 11, 2025 if the only obstacle is HSR approval. The filings also flag the risk that a required regulatory approval is not obtained or is obtained with unanticipated conditions.

What is TE's role in the transaction, and where can investors find more detail?

TE Connectivity plc is a party to the Transaction Agreement solely as guarantor of certain obligations of its subsidiary Buyer, TE Connectivity Corporation, which will acquire the Blockers and merge Merger Sub into Relay. The complete agreement will be filed with TE's 10-Q for the quarter ended March 28, 2025. The press release and investor presentation (Exhibits 99.1 and 99.2) are available on TE's website under the Investors section.

TEL 8-K: Material Agreements & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed February 12, 2025. Cited figures are marked; the original filing is the authoritative source.

On February 11, 2025, TE Connectivity (TEL) signed a Transaction Agreement to acquire Richards Manufacturing Co., a U.S. provider of underground and overhead electrical utility grid products, for an all-cash consideration of approximately $2.3 billion^a, subject to customary post-closing adjustments.

The deal is structured as a Blocker Sale followed by a reverse triangular merger of Merger Sub into Relay Holding, LLC, with Relay surviving as a wholly owned indirect subsidiary of TE. TE is party to the agreement only as guarantor of Buyer's obligations. Management expects the acquired business, which generates roughly $400 million^b in annual sales with mid-30% EBITDA margins and double-digit recent revenue growth, to be reported within the Industrial Solutions segment.

TE projects a mid-teens return on invested capital once tax, revenue and cost synergies are realized, and expects roughly $0.10^c of accretion to adjusted EPS in the first full year, including financing costs and excluding acquisition and amortization expenses. The transaction is to be financed with a mix of cash on hand and new permanent debt, which TE says is consistent with its balanced approach of shareholder returns and M&A.

Closing is subject to HSR Act clearance and other customary conditions, with an outside date of June 11, 2025 (extendable to December 11, 2025 in certain regulatory scenarios), and is expected in TE's fiscal third quarter of 2025. The filing is largely a disclosure of a signed agreement; the full Transaction Agreement will be filed with the 10-Q for the quarter ended March 28, 2025, so detailed terms such as the purchase price mechanics and indemnities are not yet available.

02—Key points

Key Highlights

Acquisition of Richards Manufacturing for approximately $2.3 billion in all cash, subject to customary post-closing adjustments, funded by cash on hand and new permanent debt
Richards brings roughly $400 million in annual sales and mid-30% EBITDA margins, with double-digit recent revenue growth, to TE's Industrial Solutions segment
Strategic fit in North American utility grid infrastructure, including leading positions in medium-voltage cold-shrink cable accessories and network protectors, supporting TE's Energy business (about $1 billion in revenue, roughly 50% utility exposure)
Management targets a mid-teens ROIC upon completion of tax, revenue and cost synergies, with a significant tax attribute benefit cited in the investor presentation
Expected approximately $0.10 accretion to adjusted EPS in the first full year, including financing costs and excluding acquisition and amortization-related expenses
Closing expected in TE's fiscal third quarter of 2025 (ending June 2025), subject to HSR Act waiting period expiration and other customary conditions; outside date June 11, 2025, extendable to December 11, 2025 in certain cases
Full Transaction Agreement to be filed with the Form 10-Q for the quarter ended March 28, 2025, so detailed terms such as indemnities and adjustment mechanics are not yet public

03—Questions

Frequently Asked Questions

How much is TE Connectivity paying for Richards Manufacturing, and how will it be financed?
TE is paying an aggregate consideration of approximately $2.3 billion in all cash, subject to customary post-closing adjustments. The purchase is expected to be funded through a combination of cash on hand and new permanent debt obtained before closing.
What does Richards Manufacturing contribute to TE's financials?
Management expects Richards to generate approximately $400 million in annual sales with EBITDA margins in the mid-30% range. The business has experienced double-digit revenue growth in recent years. It will be reported within TE's Industrial Solutions segment and is expected to be accretive to TE's and the segment's sales growth and adjusted operating margins.
What is the expected earnings impact and return profile of the deal?
TE expects roughly $0.10 of accretion to adjusted EPS in the first full year, including financing costs and excluding acquisition and amortization-related expenses. Management expects a mid-teens return on invested capital upon completion of tax, revenue and cost synergies, which it projects in roughly year five.
What could prevent or delay the deal from closing?
Closing is conditioned on expiration or termination of the HSR Act waiting period, continued accuracy of representations and warranties (subject to materiality standards), no material adverse effect on Relay, and no court or governmental order prohibiting the transaction. The agreement can be terminated if closing has not occurred by June 11, 2025, which extends automatically to December 11, 2025 if the only obstacle is HSR approval. The filings also flag the risk that a required regulatory approval is not obtained or is obtained with unanticipated conditions.
What is TE's role in the transaction, and where can investors find more detail?
TE Connectivity plc is a party to the Transaction Agreement solely as guarantor of certain obligations of its subsidiary Buyer, TE Connectivity Corporation, which will acquire the Blockers and merge Merger Sub into Relay. The complete agreement will be filed with TE's 10-Q for the quarter ended March 28, 2025. The press release and investor presentation (Exhibits 99.1 and 99.2) are available on TE's website under the Investors section.

04—Continue

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