The acquisition will combine complementary products to meet the growing demand for underground electrical networks.

TE Connectivity has agreed to acquire Richards Manufacturing for $2.3bn in an all-cash transaction, a move set to enhance its presence in North America’s electrical utility sector.

The acquisition will merge complementary product lines and capitalise on the growing demand for underground electrical networks.

Richards Manufacturing, known for its utility grid products, has seen double-digit revenue growth in recent years.

The New Jersey-based company specialises in underground distribution equipment, including medium voltage cold-shrink cable accessories and network protector products.

The Richards management team will remain with TE post-acquisition and continue leading the business.

The deal is subject to standard post-closing adjustments and will be financed through cash reserves and additional debt.

TE Connectivity anticipates mid-teens returns on invested capital, factoring in tax, revenue and cost synergies.

The acquired business will be integrated into TE’s Industrial Solutions segment, contributing an estimated $400m in annual sales and earnings before interest, taxation, depreciation and amortisation margins in the mid-30% range.

The first full year post-acquisition is projected to see a $0.10 increase in adjusted earnings per share, inclusive of financing costs and exclusive of acquisition and amortisation-related expenses.

The transaction, currently awaiting regulatory approvals and other standard closing conditions, is expected to be finalised in TE’s fiscal third quarter, ending in June 2025.

TE Connectivity CEO Terrence Curtin stated: “One of the key pillars of our strategy is investing in long-term secular growth trends that further our commitments to being a trusted partner to customers around the world and creating value for our owners.

“We have been strategically investing in our Energy business over the past several years to be a growth driver for TE. We’ve benefitted from our focus on utility-scale renewables and grid reliability by providing our customers with innovative products required for the ongoing evolution of the energy grid.

“The acquisition of Richards Manufacturing aligns with our strategy and positions us to further capitalise on an accelerating grid replacement and upgrade cycle in North America, driven by ageing infrastructure, the increased hardening of the network and the upgrades that are required to support the increase in energy demand. We look forward to building on the momentum of Richards’ growth trajectory and welcoming their talented team to TE.”