ITT, a manufacturing company based in Stamford, Connecticut, that produces components for the transportation, industrial and energy markets, has signed an agreement to acquire Svanehøj, a Denmark-based startup, for $395 million.
Svanehøj is a supplier of pumps and a specialist in handling critical liquids. Its product portfolio includes deep well gas cargo pumps, fuel and energy pumps, and tank control systems. Svanehøj’s products manage liquids that are critical for the energy transition, including ammonia, liquefied petroleum gas (LPG), liquefied natural gas (LNG), methanol, hydrogen, and CO2. The company also has an “established global aftermarket business” that provides services for its installed base and for third-party equipment.
The deal will bring Svanehøj into ITT’s industrial process (IP) segment, which is focused on highly engineered pumps, valves, and aftermarket services. The acquisition is expected to close in the first quarter of 2024, subject to customary regulatory approvals. Svanehøj generated approximately $140 million in 2022.
“Svanehøj is an outstanding addition to ITT, with extensive experience in the marine pumps industry and a complementary portfolio of highly engineered flow products aligned to the energy transition,” Luca Savi, CEO and president of ITT, said in a statement. “The company has leadership positions in adjacent markets and a strong installed base, with a track record of above-market growth. Like ITT, Svanehøj has developed a strong aftermarket offering that provides good visibility to recurring revenue streams thanks to its global service network and a data-driven approach to capturing opportunities.”
The Deal will Help Decarbonize the Marine Industry
According to ITT, the company’s product portfolio and service lines put Svanehøj in a strong position to benefit from the energy transition and efforts to decarbonize the marine industry. In particular, marine vessels are facing new regulations for a 50% reduction in greenhouse gas emissions by 2050, according to the International Maritime Organization’s “IMO 2023” GHG Strategy.
With these new regulations, the marine industry will need to upgrade its vessels and invest in new fuel technologies. Plus, demand for new marine vessel builds is expected to grow 5% from 2023 to 2025. Vessels and carriers fueled by liquid natural gas are expected to grow more than 15% through 2027.
The acquisition comes as other innovations are being introduced to the marine industry, including new sailing methods for carriers. Recently, Berge Bulk, one of the world’s leading independent dry bulk owners with a fleet of 85 vessels, unveiled its Newcastlemax bulker, Berge Olympus, with four retrofitted BARTech WindWings by Yara Marine Technologies. The WindWings provide sailing power that will save 6 tons of fuel per day on an average worldwide route and reduce carbon emissions by approximately 19.5 tons per day.