ITT Inc. (NYSE:ITT) Q3 2023 Earnings Call Transcript

Emmanuel Caprais: But I wouldn’t say — like the European region, I wouldn’t say this is a cut that we look at specifically when we look at M&A. We really look at companies that are high quality, that have an ability to differentiate from the competition. And that’s what we saw with Habonim. And coincidently, that’s what we saw also with Svanehøj. It’s also easier for us to — being European, to get to know the business there and to see and to connect with the people. So we use that for sure. But I wouldn’t say that Europe is a priority for our M&A target.

Luca Savi: No, that’s right.

Nathan Jones: I would have thought this Svanehøj business would be definitely more focused on growth and probably less focused on cost synergies. Can you talk about the cost synergies that are there and whether this is more of a don’t break what’s going on there already in terms of taking cost out and focus more on growth?

Luca Savi: You’re spot on, Nathan. And I think that when one of the things that we really liked about Svanehøj is the team, is Søren, Johnny, the management team, very competent. They know their market. They know their customers very well. They’ve got a differentiated service, differentiated products and leadership position. So it’s a growth play more than cost synergies. So definitely, that’s the case in industry in attractive markets. So it’s cryogenic pumps, which is adding to our portfolio. And that probably would be another lever for growth for our goods, parts and our pumps business traditionally over here, it’s marine, where there’s going to be investment in terms of green in the future. And while you talk about the energy transition and alternative fuels being ammonia, Svanehøj would be a great player in that. So this is really what we like, the growth opportunities and the team. And for sure, they know what they do. And we are very happy with that.

Nathan Jones: Just any color on what you expect the growth rate to be over the next few years for them?

Emmanuel Caprais: So we expect that for the next several years — so at least for the first four to five years, it’s going to be low double digits and then after that, high single digits.

Operator: Our last question will be coming from Jeff Hammond of KeyBanc Capital Markets.

Emmanuel Caprais: So it doesn’t sound like we can get — we can talk to Jeff. So I think we can close the call.

Operator: Thank you. This does conclude today’s teleconference. Please disconnect your lines at this time, and have a wonderful day.

Luca Savi: Thank you.