Press Releases | 02/10/2023

Flowserve to Acquire Velan in an All-cash Transaction Valued at Approximately $245 million (C$329 million)

  • Accelerates Flowserve’s 3D Strategy and provides meaningful aftermarket revenues
  • Velan brings a highly complementary valve portfolio to Flowserve’s FCD segment
  • Transaction expected to be accretive to Flowserve’s Adjusted EPS in first full year after close
  • Transaction provides compelling value to Velan shareholders following an extensive and robust review of strategic options
  • Velan shareholders to receive C$13.00 in cash per multiple voting and subordinate voting share, representing a significant premium to Velan’s 30-day volume weighted price

DALLAS & MONTREAL – February 10, 2023 – Flowserve Corporation (“Flowserve”) (NYSE: FLS), a leading provider of flow control products and services for the global infrastructure markets, and Velan Inc. (“Velan”) (TSX: VLN), a leading manufacturer of highly engineered industrial valves, today announced that they have entered into a definitive agreement (the “Arrangement Agreement”) under which Flowserve will acquire Velan in an all cash transaction (the “Transaction”) valued at approximately $245 million (C$329 million), including the purchase of all of the issued and outstanding Velan equity for approximately $209 million (C$281 million) and the assumption of approximately $36.3 million (C$48.9 million) in outstanding gross debt as of November 30, 2022. Flowserve will also assume Velan’s $31.4 million (C$42.2 million) of cash and cash equivalents, also as of November 30, 2022. The Transaction is expected to close by the end of the second quarter of 2023.

Founded in Montreal in 1950, Velan is a leading manufacturer of industrial valves with a strong presence in the nuclear, cryogenic and defense markets. Velan is a family-controlled business, with a team of 1,650 people and manufacturing facilities in nine countries. Through its fiscal third quarter ended November 30, 2022, Velan reported trailing twelve-month revenues of approximately $380 million with reported EBITDA of approximately $21 million. Upon completion of the Transaction, Velan will become part of Flowserve’s Flow Control Division (FCD) segment.

Velan adds significant value within Flowserve’s existing valves portfolio and further builds upon Flowserve’s existing assets through the addition of Velan’s premier brands, strong heritage and technical expertise in attractive and diverse end markets. The additional scale, footprint consolidation and procurement opportunities provided by the combination is expected to result in substantial synergies. Further, the Transaction is expected to increase Flowserve’s aftermarket potential, based on the large installed base of Velan products and the expansive network of Flowserve’s Quick Response Centers (QRCs.)

In addition to revenue synergies created through a global aftermarket footprint, Flowserve expects to realize approximately $20 million (C$26 million) of run-rate cost synergies within two years after close. The Transaction is expected to be accretive to Flowserve’s adjusted EPS in the first full year following close. Including anticipated synergies, the economics imply an EBITDA multiple of less than 7x.

“We are excited about the opportunity to add Velan and its talented team to the Flowserve family,” said Scott Rowe, Flowserve’s President and Chief Executive Officer. “With its strong positioning in the nuclear, cryogenic, industrial and defense markets and highly complementary product portfolio, the addition of Velan furthers our Diversification, Decarbonization and Digitization (3D) strategy. The Transaction also meets our disciplined financial criteria, bringing meaningful aftermarket revenue and synergy opportunities.”

Velan’s Chairman of the Board and of its Special Committee, James Mannebach, commented, “This agreement is the culmination of an extensive and robust review of strategic options to maximize shareholder value and reflects the incredible efforts of our team members to serve customers with a focus on innovation and excellence. The Transaction provides Velan shareholders an opportunity to realize an immediate and attractive premium for their shares and is recommended by the Board of Directors and Special Committee of Velan. We see a very bright future for Velan as part of Flowserve’s leading global flow control business, and we look forward to working closely with their team to quickly integrate and realize the significant benefits of this complementary combination.”

Velan Holding Co. Ltd. (“Velan Holding”), Velan’s controlling shareholder, the sole holder of multiple voting shares, representing approximately 72% of the total shares outstanding of Velan and 92% of the aggregate voting rights attached to all Velan shares, respectively; together with Kernwood, an affiliate of Ed Kernaghan, a director of Velan, holding 1,405,500 subordinate voting shares, have entered into support and voting agreements pursuant to which they have agreed to vote all of their shares in favor of the Transaction at the Special Meeting.

Following closing of the Transaction, Flowserve expects to maintain a significant presence in Québec, including Velan’s Montreal, Québec head office and the combined company will continue to maintain a significant global presence.

Velan Board Recommendation

The Transaction follows the unanimous recommendation of Velan’s Special Committee of the Board of Directors, which reviewed various strategic alternatives available to Velan in order to enhance shareholder value (including status quo and a variety of other stand-alone structures). The Transaction represents the best and highest proposal received by the Special Committee as part of its process.


The C$13.00 purchase price per multiple voting and subordinate voting share represents a 119% premium to Velan’s 30-day volume-weighted average price per subordinate voting share on the Toronto Stock Exchange, and a 100% premium to the unaffected price of the subordinate voting shares on February 8, 2023. The cash consideration provides immediate liquidity and certainty of value to Velan shareholders.


After receiving a unanimous recommendation from the Special Committee of the Board of Directors of Velan, comprised solely of independent directors, and fairness opinions from BMO Capital Markets and Richter LLP, the Velan Board of Directors has unanimously determined (with Messrs. Ivan Velan, Peter Velan, Rob Velan and Tom Velan abstaining from voting thereon, due to their interest in Velan via Velan Holding) that the consideration to be received by Velan shareholders pursuant to the Transaction, is fair, from a financial point of view, to such holders, that the Transaction is in the best interests of Velan and recommends that shareholders vote in favor of the Transaction.


The Transaction is expected to proceed by way of a plan of arrangement by which Flowserve would acquire all of the issued and outstanding shares of Velan, subject to the satisfaction of customary closing conditions, including applicable court and regulatory approvals and the approval of at least 66⅔% of the votes cast by Velan shareholders represented at a Special Meeting in person or represented by proxy as a single class, and a simple majority of the votes cast by the Velan shareholders, by class, after excluding votes from certain shareholders. The Transaction is not subject to any financing conditions. The Transaction is expected to close by the end of the second quarter of 2023.

Offer Details

Further details regarding the terms of the Transaction are set out in the Arrangement Agreement, which will be publicly filed in due course by Flowserve at and Velan under its issuer profile at Additional information regarding the Transaction, the terms of the Arrangement Agreement, the background to the Transaction, the rational for the recommendations made by the Special Committee and the Board of Directors of Velan and how Velan shareholders can participate in and vote at the Special Meeting will be contained in a management proxy circular that Velan will prepare, file and mail to Velan shareholders in advance of the Special Meeting, which will also be made available on SEDAR under Velan’s profile at Shareholders are urged to read these and other relevant materials when they become available.


Citi is serving as financial advisor and Baker McKenzie is serving as legal advisor to Flowserve. BMO Capital Markets is serving as financial advisor and Davies Ward Phillips & Vineberg LLP is serving as legal advisor to Velan. Norton Rose Fulbright Canada LLP is acting as legal advisor to the Special Committee and McCarthy Tetrault LLP is acting as legal advisor to Velan Holding. Richter LLP has provided a fairness opinion to the Special Committee and the Board.

Flowserve Contacts

Investor Contacts:

Jay Roueche, Vice President, Investor Relations & Treasurer, (972) 443-6560
Mike Mullin, Director, Investor Relations, (214) 697-8568

Velan Contact

Rishi Sharma, Chief Financial Officer, (438) 817-4430

About Flowserve

Flowserve Corp. is one of the world’s leading providers of fluid motion and control products and services. Operating in more than 50 countries, the company produces engineered and industrial pumps, seals and valves as well as a range of related flow management services. More information about Flowserve can be obtained by visiting the company’s Web site at

About Velan Inc.

Founded in Montreal in 1950, Velan Inc. is one of the world’s leading manufacturers of industrial valves. Velan Inc. is a family-controlled public company, employing approximately 1,650 people with manufacturing facilities in 9 countries. Velan Inc. is a public company with its shares listed on the Toronto Stock Exchange under the symbol VLN.

Safe Harbor Statement

This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended, as well as forward-looking statements pursuant to applicable Canadian securities laws. Words or phrases such as, “may,” “should,” “expects,” “could,” “intends,” “plans,” “anticipates,” “estimates,” “believes,” “forecasts,” “predicts” or other similar expressions are intended to identify forward-looking statements, which include, without limitation, statements with respect to the rationale of Flowserve or Velan for entering into the Arrangement Agreement, the expected benefits of the Transaction, the timing of various steps to be completed in connection with the Transaction and other statements that are not material facts.

The forward-looking statements included in this news release are based on our current expectations, projections, estimates and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties may cause actual results to differ materially from what is forecast in such forward-looking statements, and include, without limitation, the following: (a) the possibility that the Transaction will not be completed on the terms and conditions, or on the timing, currently contemplated, and that it may not be completed at all, due to a failure to obtain or satisfy, in a timely manner or otherwise, required shareholder, court and regulatory approvals and other conditions of closing necessary to complete the Transaction or for other reasons; (b) the possibility of adverse reactions or changes in business relationships resulting from the announcement or completion of the Transaction; (c) risks relating to Velan’s ability to retain and attract key personnel during the interim period; (d) the possibility of litigation relating to the Transaction; (e) credit, market, currency, operational, liquidity and funding risks generally and relating specifically to the Transaction, including changes in economic conditions, interest rates or tax rates; (f) business, operational and financial risks and uncertainties relating to the COVID-19 pandemic; and (g) other risks inherent to Flowserve or Velan’s respective businesses and/or factors beyond their control which could have a material adverse effect on either of the parties or their ability to complete the Transaction.

All forward-looking statements included in this news release are based on information available to us on the date hereof, and we assume no obligation to update any forward-looking statement.