Eaton acquires Royal Power to capitalize on electrification trend

Power management company Eaton has completed the acquisition of Royal Power Solutions, a U.S.-based manufacturer of high-precision electrical connectivity components used in electric vehicle, energy management, industrial and mobility markets. The acquisition positions Eaton to capitalize on electrification trends across multiple high-growth markets, the company said.

Under the terms of the agreement, Eaton paid USD600 million for Royal Power Solutions, which represents approximately 13.6 times the company’s estimated 2022 EBITDA.

In August 2021, Eaton completed the sale of its hydraulics business to Danfoss A/S, a Danish industrial company, for USD3.3 billion. Eaton’s hydraulics business, which had sales of USD1.8 billion in 2020 and 10,000 employees worldwide, was a global leader in hydraulics components, systems, and services for industrial and mobile equipment. The sale marked another milestone in Eaton’s continued transformation into a higher growth company with more earnings consistency.

Eaton now has four global businesses – Aerospace, Electrical, eMobility and Vehicle – with Electrical and Aerospace accounting for the majority of the company’s profit.

“Growth opportunities tied to the electrification of our economy are accelerating, and Eaton is fully participating through our mobility and electrical businesses,” said Heath Monesmith, president and chief operating officer, Industrial Sector, Eaton. “And the addition of Royal Power Solutions enhances our ability to capitalize on this secular growth trend across our eMobility, aerospace and electrical businesses.”

Royal Power Solutions has approximately 450 employees and manufacturing facilities in Carol Stream, Illinois, U.S.A., and Queretaro, Mexico, along with a sales and engineering office in Canton, Michigan, U.S.A.