Tennant Co. is making its largest acquisition ever, a $350 million cash deal for an Italian company.
The Golden Valley-based cleaning products manufacturer announced the deal for IPC Group with a positive fourth-quarter earnings report.
IPC, which makes small and midsize commercial cleaning machines and multipurpose cleaning trolleys and window-washing systems, had sales of $203 million in 2016. The deal is expected to close in the second quarter.
Tennant CEO Chris Killingstad said the IPC acquisition "aligns with Tennant's growth aspirations."
The deal will more than double Tennant's business in Europe, the Middle East and Africa, he said.
Tennant also announced a $7 million to $8 million restructuring plan that will cut its workforce by about 3 percent. The company employs 3,300 worldwide, with 900 of those employees in Golden Valley. The cuts are expected in March.
The reductions include vacant positions, and a severance package will be offered, said spokeswoman Kathryn Lovik.
"Through this acquisition and our restructuring actions, we are positioning Tennant to accelerate revenue growth and improve profitability," Killingstad said in the release.
Tennant has had a long-term goal to exceed $1 billion in annual revenue, and the acquisition of IPC Group should help the company achieve that goal, officials said.
In 2017, the company expects total sales in the range of $810 million to $830 million, up about 1 to 3 percent. Adjusted earnings should be in the range of $2.50 to $2.70 per share and would include the restructuring charge announced Thursday.
Tennant made $15.4 million, or 85 cents per share, on fourth-quarter sales of $211.7 million. In the fourth quarter a year ago, it earned $13.2 million, or 73 cents per share, on sales of $205.9 million. Adjusted earnings from the fourth quarter of 2015, excluding a restructuring and asset impairment charge, were $14 million, or 78 cents per share.
For the full year, Tennant earned $46.6 million, or $2.59 per share, on sales of $808.6 million.
That's up from $32.1 million, or $1.74 per share, on net sales of $811.8 million in 2015. Adjusted earnings for 2015 were $2.49 per share.
Shares of Tennant closed Thursday at $73.25, up $3.15 or 4.5 percent.