Power management company Eaton on January 21 announced it has entered into an agreement to sell its Hydraulics business to Danfoss A/S, a Danish industrial company, for $3.3 billion in cash — a 13.2 multiple of 2019 EBITDA.

Eaton’s Hydraulics business accounted for 86% of Eaton’s Hydraulics segment revenue in 2019. The business had sales of $2.2 billion in 2019 and employs approximately 11,000 people, the company reports. Eaton is retaining the Filtration and Golf Grip businesses currently reported in the company’s Hydraulics segment.

“We believe this transaction will create substantial value for our shareholders and allow our hydraulics employees to be part of a company that has a strong commitment to the hydraulics industry,” says Craig Arnold, Eaton chairman and CEO.

Adds Kim Fausing, Danfoss president and chief executive officer, “Eaton Hydraulics is a highly respected player in the global hydraulics industry, recognized for its dedicated people and strong brands. By combining the knowledge and experience of these two companies, our customers will benefit from unmatched expertise from a single partner.”

The transaction is subject to customary closing conditions and regulatory approvals and is expected to close by the end of the year, according to the company.