Madison Air Solutions (NYSE:MAIR) said it has signed an agreement to acquire ebm-papst, a Germany-based provider of high-performance airflow technology, in a transaction valued at $5.8 billion in total enterprise value.
The deal includes approximately $375 million of non-interest-bearing operating liabilities that Madison Air said were negotiated as a purchase-price reduction. The company placed the enterprise purchase price at $5.4 billion, or $5 billion after expected future tax savings. Madison Air expects the transaction to close around year-end, subject to customary conditions.
Technology and market expansion
“Fans are the enabler of nearly every airflow system we serve and are often a limiting factor in overall system performance, efficiency, and cost,” Wyant said.
Madison Air said a fan can account for less than 10% of a system’s upfront capital cost, while energy consumption can represent up to 80% of total ownership costs over the system’s life. The company expects the combination to improve its ability to serve mission-critical applications, including healthcare facilities, data centers, semiconductor manufacturing, clean rooms, pharmaceutical environments and advanced manufacturing.
ebm-papst, founded in 1963 and headquartered in Mulfingen, Germany, operates in about 40 countries. It is expected to generate approximately $2.8 billion in revenue and $343 million in adjusted EBITDA during 2026, according to Madison Air.
The acquired company derives about 92% of sales directly from customers. Its top 50 customers represented approximately 47% of 2025 sales, while no individual customer accounted for more than roughly 4% of revenue, Madison Air said.
The acquisition is expected to increase Madison Air’s addressable market by approximately $30 billion, to about $70 billion on a pro forma basis from roughly $40 billion currently. It will also nearly double the company’s direct channel presence and add an installed base of more than 250 million fans, supporting potential replacement, retrofit, service and aftermarket opportunities.
Financial terms and expected synergies
Madison Air said its effective $5 billion enterprise purchase price equates to 14.6 times ebm-papst’s forecast 2026 EBITDA, or about 10 times EBITDA when expected cost synergies are included.
The company expects to generate approximately $160 million in annual run-rate cost synergies by the end of the third year after closing, including about $40 million during the first 12 months. The identified savings are expected to come from direct-material purchasing, value analysis and value engineering efforts, product optimization, freight, operating leverage, simplification and scale benefits.
Chief Financial Officer JJ Foley said the synergy target does not include potential revenue benefits from cross-selling, customer access, channel leverage, digital collaboration and aftermarket expansion. Madison Air expects the transaction to be at least low-single-digit accretive to adjusted earnings per share in the first full year after closing, excluding intangible amortization, with low-double-digit accretion expected in the second year.
For 2026, Madison Air projects pro forma revenue of approximately $6.65 billion and adjusted EBITDA of approximately $1.39 billion before synergies. The company reiterated its long-term targets for mid-single-digit annual revenue growth and high-single-digit annual adjusted EBITDA growth.
Foley said ebm-papst currently operates at an adjusted EBITDA margin of about 12%. If the full $160 million synergy target were attributed to ebm-papst, its margin would rise to approximately 18%, he said. Madison Air expects the combined company to approach a 25% adjusted EBITDA margin in the third year following the transaction.
Funding and deleveraging plan
The transaction will be paid entirely in cash and financed through a combination of cash on hand, debt and equity. Foley said Madison Air has pre-approved financing packages from UniCredit and Wells Fargo, while Larry Gies’ Madison Air Solutions has provided full support for the equity component.
Madison Air expects net leverage to be below four times at closing on a trailing 12-month basis. The company intends to prioritize deleveraging while continuing to invest in organic growth and innovation, targeting leverage of approximately 2.5 times on a trailing 12-month basis two years after the closing.
Wyant said Madison Air’s North American operations and ebm-papst’s established presence in Europe and Asia would give the combined company greater ability to support global customers. She added that Madison Air does not expect to disrupt ebm-papst’s relationships with global original equipment manufacturers, noting that Madison Air is currently a customer of ebm-papst with purchases below $100 million annually.
“ebm-papst will continue to serve its OEM customers as a trusted partner,” Wyant said. Madison Air said it plans to use a dedicated integration team, including German-speaking personnel, and that a minority of anticipated synergies would require labor restructuring.
About Madison Air Solutions (NYSE:MAIR)
We take up to 25,000 breaths a day and spend up to 90% of our lives indoors, often breathing air that’s two to five times more polluted than outdoor air. Clean air is absolutely essential to human life, yet most people rarely think about the air we breathe at home, in our schools, in healthcare facilities and in the workplace. Poor air quality doesn’t just affect comfort; it undermines health, productivity and performance. Improving air quality is a fundamental principle that is a key tenet in everything we do.
