Chart Industries and Flowserve Corp. to combine

With an installed base of more than 5.5 million assets in more than 50 countries, the combined company will address the full customer lifecycle from process design through aftermarket support. The combined company generated net revenue of approximately US$8.8 billion on a combined LTM basis as of the end of 1Q25, drawn from diverse, high-growth, attractive end markets, including approximately US$3.7 billion in aftermarket services revenue, representing approximately 42% of combined revenue.

Under the agreement, which has been unanimously approved by the board of directors of each company, at the closing of the transaction Chart shareholders will receive 3.165 shares of Flowserve common stock for each share of Chart common stock owned. Following the close of the transaction, Chart shareholders will own approximately 53.5% and Flowserve shareholders will own approximately 46.5% of the combined company, on a fully diluted basis.

“Combining Chart and Flowserve creates a comprehensive solutions platform, with the financial strength and resilience to continue driving growth and long-term value,” said Jill Evanko, President and CEO of Chart. “Together we will provide a complete system of capabilities from FEED to mission critical equipment through aftermarket and servicing, delivering high-quality, value-added solutions to an expanded, global customer base. With robust cash flow, meaningful synergies, and greater aftermarket growth opportunities, the combined company will be ideally positioned to deliver superior and lasting value to its shareholders.”

“The merger will create a differentiated leader with the scale and resilience to meet the significant demand for comprehensive industrial process technologies and services,” added Scott Rowe, President and CEO of Flowserve. “Chart’s and Flowserve’s highly complementary businesses will strengthen our ability to meet our customers’ needs, empower innovation and drive long-term, sustainable growth. The combined company will operate across diversified end markets with further exposure to premium, high-growth areas and a substantial aftermarket franchise – resulting in increased commercial opportunities. I am confident that together, we will capitalise on long-term value creation for our customers, partners, shareholders and combined global team.”

Strategic and financial benefits

• Comprehensive suite of world-class, differentiated solutions: The combination brings together Chart’s leading expertise in process technologies across compression, thermal, cryogenic, and specialty solutions and Flowserve’s leading capabilities in flow management. Combining digital platforms that underpin this full suite of solutions will enable further opportunities to differentiate solutions, offering a comprehensive digital overlay, including monitoring and predictive capabilities.
• Diversified and attractive end markets: The combined company will have leading capabilities across general industrial, industrial gases, data centres, space, transportation, nutrition, carbon capture, energy, power generation, nuclear, chemical, LNG, water, and mining and minerals. The combined company will be more predictable and resilient.
• Expanded aftermarket franchise: The combined company will have significant recurring revenue streams, with a global installed base of more than 5.5 million assets and 42% of total combined revenue from aftermarket and service. Chart and Flowserve expect to grow the aftermarket businesses by offering enhanced services and solutions to customers through an expanded global installed base and broad geographic reach.
• Upside from significant cost and commercial synergies: The combination is expected to generate approximately US$300 million of annual cost synergies within three years following the transaction close, primarily from materials and procurement savings, roofline consolidation, organisational efficiencies, and elimination of duplicate public company costs. The companies also expect to deliver commercial revenue synergies over time representing at least an incremental 2% growth on the combined company’s revenue.
• Committed to investment grade balance sheet with strong cash flow profile: The combination is expected to be meaningfully accretive to the combined company’s adjusted EPS in the first year following closing. The combined company is expected to have a leverage ratio of 2.0x net debt to adjusted EBITDA at close. On a combined basis, Chart and Flowserve generated US$1.8 billion of cash flow over the 12 months ended 31 March 2025. This strong financial profile will support a balanced capital allocation strategy, deleveraging, prioritising growth investments, and capital returns. The combined company expects to pay a quarterly dividend consistent with Flowserve’s historical per share payout levels and expects to generate additional interest expense savings.

Upon closing, the combined company’s Board will comprise 12 directors, six of whom will be from Chart and six from Flowserve. Evanko will serve as the Chair of the combined company’s Board of Directors, Rowe will serve as CEO of the combined company, and John Garrison will serve as Lead Independent Director of the combined company’s Board.

Following the closing of the transaction, the combined company will have its headquarters in Dallas, Texas, and expects to maintain a presence in Atlanta and Houston, supported by a global footprint across more than 50 countries. The combined company will assume a new name and brand following close.

The transaction is expected to close in 4Q25, subject to approval of shareholders of both Chart and Flowserve, the receipt of regulatory approvals, and the satisfaction of other customary closing conditions.

Wells Fargo is serving as financial advisor and Winston & Strawn LLP is serving as legal advisor to Chart. Collected Strategies is serving as Chart’s strategic communications advisor.

Guggenheim Securities LLC is serving as financial advisor and Cravath, Swaine & Moore LLP is serving as legal advisor to Flowserve. Joele Frank, Wilkinson BrimmerKatcher is serving as strategic communications advisor. Veriten is serving as an independent strategic advisor to Flowserve.

Read the article online at: https://www.lngindustry.com/liquid-natural-gas/05062025/chart-industries-and-flowserve-corp-to-combine/