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DALLAS - CSW Industrials, Inc. (NYSE:CSWI) announced today it has signed a definitive agreement to acquire Motors & Armatures Parts (MARS Parts) for $650 million in cash, with a potential additional $20 million earn-out based on revenue targets.
The transaction, expected to close in CSW’s fiscal third quarter of 2026, represents approximately 12.5 times MARS Parts’ trailing twelve-month adjusted EBITDA of $51.8 million, or 10.5 times when accounting for identified synergies.
MARS Parts is one of North America’s largest distributors of HVAC/R parts and supplies, specializing in motors and capacitors. The acquisition excludes the equipment segment of the existing Motors & Armatures business.
CSW plans to fund the purchase through a combination of a Syndicated Term Loan A and borrowings under its existing $700 million revolving credit facility. The company expects to maintain a leverage ratio of approximately 2.0 times EBITDA upon closing. With a current ratio of 2.86 and moderate debt levels, InvestingPro data suggests CSW is well-positioned to manage this additional financing while maintaining financial flexibility.
"This acquisition will expand our existing HVAC/R product portfolio with highly complementary offerings and enhance our value proposition in the HVAC/R end market," said Joseph B. Armes, Chairman, President, and Chief Executive Officer of CSW Industrials, in a statement included in the press release.
The company expects the MARS Parts business to achieve a 30% adjusted EBITDA margin run rate within twelve months after closing through cost synergies, including optimizing facilities, scaling supply chains, and reducing duplicative spending.
With this acquisition, CSW will have invested over $1.65 billion in acquisitions in its ten years as a public company, including approximately $1 billion within the last year, according to the company’s announcement.
The transaction remains subject to customary closing conditions, including regulatory approvals. With the stock currently trading near its 52-week low and at Fair Value according to InvestingPro analysis, investors can access detailed insights and 11 additional ProTips about CSW’s financial outlook through InvestingPro’s comprehensive research reports, available for over 1,400 US stocks.
In other recent news, CSW Industrials announced the promotion of Fang Wang to the position of vice president and chief accounting officer. Previously serving as vice president and corporate controller, Wang will now act as the company’s principal accounting officer. Concurrently, James Perry will continue his role as executive vice president and chief financial officer, although he will no longer serve as the principal accounting officer. In addition to these leadership changes, CSW Industrials declared a regular quarterly cash dividend of $0.27 per share. This dividend is scheduled to be paid on August 8, 2025, to shareholders who are recorded as of the close of business on July 25, 2025. These developments reflect CSW Industrials’ ongoing corporate activities and shareholder engagement.
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