EBM-Papst, a specialist in cooling technology, is being sold to the U.S. company Madison Air

The fan and drive specialist EBM-Papst is set to be acquired by the U.S. company Madison Air for nearly 4.8 billion euros. Through this acquisition, the company aims to expand its business in North America among other things. EBM-Papst supplies components for the growing market in cooling AI data centers, as well as fans and pump drives for HPC charging stations.

The family-owned company EBM-Papst based in Mulfingen, Baden-Württemberg, is getting a new owner. According to reports from the Handelsblatt, the company is valued at 5.1 billion euros in this transaction, with a net sale price of 4.8 billion euros. The acquisition is still subject to regulatory approvals and is expected to be completed by the end of 2026.

EBM-Papst expects Madison Air to provide better access to the U.S. market. Demand for cooling solutions is rising there due to factors such as the expansion of data centers and AI infrastructure. In the previous fiscal year, EBM-Papst’s sales in the U.S. increased by 25 percent to 424 million euros. The capacity of the factory in Telford, Tennessee, is set to be doubled. Madison Air currently generates around 95 percent of its revenue in North America, and through this acquisition it can expand its presence in Europe and Asia. The company produces ventilation systems for data centers and clean rooms, and it is already a customer of EBM-Papst.

Cooling is also the area for which EBM-Papst is renowned in the field of electric mobility. Compact fan and pump drives for the complex thermal management of high-power charging stations (HPC) have long been part of their product portfolio. Whether this will remain the case remains to be seen.

The company employs more than 13,000 people worldwide, of whom around 5,800 are based in Germany. In the fiscal year that ended at the end of March, sales increased by 6 percent to around 2.24 billion euros. EBM-Papst has set a sales target of 3.4 billion euros for 2029. CEO Klaus Geißdörfer stated that this goal could be achieved sooner with Madison Air.

In recent years, EBM-Papst has focused more on growth areas such as data centers, heat pumps, and cooling and climate technology. At the same time, the company has withdrawn from parts of its business with automobile manufacturers and home appliance producers. EBM-Papst’s headquarters is set to remain in Mulfingen even after the acquisition. The transaction will be funded through equity and debt capital. If the acquisition fails, documents filed with the U.S. Securities and Exchange Commission stipulate a compensation of 250 million euros for the current owners. This marks another major German climate technology specialist being acquired by an American company. In early 2024, Viessmann sold its climate and heat pump business to Carrier Global for around twelve billion euros.