Industrial conglomerate Parker Hannifin Corp. said it would buy filtration maker Clarcor Inc. for about $4 billion.

Parker Hannifin is paying $83 a share, an 18% premium to Clarcor's closing price Wednesday, and is funding the deal with cash and debt. Clarcor shares rose 15% in premarket trading. Parker Hannifin shares were inactive.

The companies valued the deal at $4.3 billion including debt.

Parker expects the deal to add to earnings per share, after certain costs are taken out, and expects annual cost synergies of about $140 million three years after closing.

Franklin, Tenn.-based Clarcor makes mobile, automotive, industrial and environmental filtration products with annual sales of about $1.4 billion. Clarcor will merge with Parker's filtration group. Parker Chief Executive Tom Williams said the deal combines Parker's strength in international markets and original equipment manufacturers with Clarcor's U.S. presence and recurring sales.

The deal boosts Parker's recurring revenue, as 80% of Clarcor's sales come from the aftermarket.

The deal is expected to close by the first quarter of Parker's 2018 fiscal year. Its 2017 first quarter ended in September. It is subject to customary closing conditions, including approval by Clarcor shareholders and regulators.

Write to Austen Hufford at austen.hufford@wsj.com

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

December 01, 2016 09:05 ET (14:05 GMT)

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