OSAKA -- Japan's Daikin Industries is acquiring a leading U.S. air filtration company with an eye on growing demand in emerging economies.
Daikin will pay about 50 billion yen ($432 million) for the entire stake in North Carolina-based Flanders, now held by investment firm Insight Equity. The deal is expected to take place by April.
Flanders books about $300 million in sales yearly. Its strength is in high-quality products for use in homes and in pharmaceutical, food and other industrial plants. Daikin, the world leader in commercial air conditioning, also offers air filters for such facilities as power plants.
The global air filtration market is said to be worth 1 trillion yen annually. The deal would boost Daikin's total sales in the field to about 130 billion yen ($1.12 billion), placing it far ahead of Swedish giant Camfil Group's roughly 5.46 billion krona ($645 million).
Demand for air filters, which keep out dust and other particles, is growing in emerging economies like China that face serious air pollution problems. Daikin aims to win new customers through Flanders' technological expertise. It also hopes to use the combined customer base to boost air conditioning sales.
Daikin projects overall North American sales of about 550 billion yen for the year ending in March. Chinese sales are expected to reach around 400 billion yen, nearing the forecast for Japan of slightly over 500 billion yen. The Flanders deal would give Daikin a further boost abroad.