Nov 11 (Reuters) - Parker Hannifin ( PH ) said on

Tuesday it would buy air and liquid filtration systems maker

Filtration Group from privately held Madison Industries for

$9.25 billion, as it seeks to expand its presence in the

aftermarket business.

The aftermarket refers to sales of replacement parts and

maintenance products after the original equipment has been sold,

providing recurring revenue streams for industrial suppliers

seeking stable, higher-margin income.

Filtration Group, which caters to industrial, automative and

the heating and cooling systems markets, generates about 85% of

its sales in the aftermarket and expects 2025 sales of $2

billion.

Meanwhile, Parker's filtration and engineered materials

segment generated $5.81 billion in revenue in fiscal 2025 and

accounted for 42.5% of total sales, the largest share among its

businesses.

The deal is set to be financed with new debt and cash on

hand, Parker Hannifin ( PH ) said, adding it expects to close within

six to twelve months.

The cash purchase price represents 19.6x of Filtration

Group's estimated adjusted core profit for the calendar year

2025, or 13.4x including expected cost synergies, the industrial

company added.

Parker estimates pre-tax cost synergies of approximately

$220 million by the end of year three after closing.

By five years, it is expected to add to Parker's organic

growth, margins and adjusted earnings, and generate a high

single-digit cash return on invested capital.

"The acquisition will create one of the largest global

industrial filtration businesses," said Jenny Parmentier, CEO of

Parker Hannifin ( PH ).

Earlier this year, Parker said it would buy Curtis

Instruments for $1 billion, which designs and manufactures

vehicle parts, to complement its motor and motion control

portfolio.