Acquisition Ground Rules
1) Acquisitions are second priority to internal growth
2) Strategic to an existing platform
- Industrial tools
- Electrical tools/ supplies
- Actuation systems
3) Keep leverage between 2-3 times LTM EBITDA (currently 2.9x)
4) Deal needs to be CMM accretive by year two
- Because CMM charges a 20% cost of capital, deal is automatically EPS accretive
- Earnings/CMM not contingent upon sale growth
- We Will Remain in Control