Turning a Product Gap Into a Platform

By late 2022, Chart Industries had built the best cold hardware portfolio for liquefied natural gas (LNG), hydrogen, and carbon capture infrastructure. They had cryogenic tanks, heat exchangers, and hydrogen plant components, with a backlog that had doubled in a year to over $2.2 billion. 

None of it mattered when the big contracts came up, however, as large infrastructure projects wanted single-vendor bids, and Chart kept arriving without compression technology. They had best-in-class components, but only half a toolbox.

Commercial synergies achieved within Chart's first year of Howden ownership, 3.5x the original year-one target of $150 million and exceeding their entire three-year target of $350 million. 

Here’s what you’ll learn: 

In 2022, Chart Industries was a cryogenic specialist on the brink of a generational infrastructure boom, but structurally too narrow to dominate it. 

The company's core products were the cold hardware of energy: brazed aluminum heat exchangers, LNG storage tanks, and specialty cryogenic systems for industrial gas, hydrogen, and carbon capture applications. 

Revenue had grown from $1.18 billion in 2020 to $1.61 billion in 2022, but the business remained fragile because its top-10 customers accounted for 38% of consolidated sales, and management openly acknowledged in its annual filings that "delays in the anticipated timing of LNG infrastructure build-out could materially reduce the demand for our products." 

A single large LNG order could spike a quarter's results or evaporate entirely. The company's 2020 guidance called for $1.75 billion in sales, but the actual result was $1.18 billion.

What Chart couldn't do was more worrying. Without compression and air-handling technology, Chart could supply tanks and heat exchangers but had to stop short of complete project solutions. This was a severe gap because in hydrogen production, LNG liquefaction, and carbon capture, the compression acts as the vital circulatory system of the plant. 

Large energy infrastructure projects increasingly demanded single-vendor full-system bids; Chart was arriving at those conversations with the right components but missing the muscle that tied them together. To combat this, the company had made smart early acquisitions, buying SES (Sustainable Energy Solutions) in 2020 for its Cryogenic Carbon Capture™ process, building out hydrogen vacuum-insulated piping capabilities, and partnering on liquid hydrogen automotive systems, but without compression, these investments couldn't reach their commercial ceiling.

The structural fragility showed up in investor expectations as much as results. Despite a strong order pipeline heading into late 2022, the order backlog had doubled year-over-year to over $2.2 billion by end of 2021, and the stock reached $240 in November 2022. The underlying business was still dependent on a handful of customers and the unpredictable timing of Final Investment Decisions at large LNG export projects. 

Being early to the energy transition was paying off in backlog, but the business model needed to change in order to convert that positioning into durable revenue and market leadership.

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Chart's answer was an acquisition that panicked its own shareholders. On November 9, 2022, the company announced it would pay $4.4 billion to acquire Howden, a provider of industrial fans, blowers, and compressors serving mining, power, and clean energy markets from KPS Capital Partners. 

The deal was priced at 12.9x Howden's LTM adjusted EBITDA before synergies, and would push Chart's net leverage to approximately 4.25x EBITDA at closing. Shares fell 57% from their peak within weeks of the announcement, an almost perfectly priced expression of market skepticism. The deal wasn't small by any measure as $4.4 billion was nearly three times Chart's 2022 annual revenue of $1.6 billion, funded through approximately $4 billion in new debt and $1.1 billion in equity.

But the industrial logic was precise. Howden brought roughly $1.8 billion in revenue, 750 engineers, and operations spanning 35+ countries, along with compression and air-handling systems that had been quietly repositioning into clean energy. 

Howden's compressors were already deployed in green hydrogen electrolysis applications; its fans were critical infrastructure in mine ventilation and nuclear cooling. Combined with Chart's proprietary IPSMR® modular LNG liquefaction process and its cryogenic storage portfolio, the two businesses could now bid on hydrogen production facilities, LNG export terminals, and carbon capture projects from engineering through aftermarket service all under one contract. 

Chart called this vision the "Nexus of Clean", clean power, clean water, clean food, clean industrials, a full-system platform that neither company could credibly offer alone.

Knowing the debt load was the existential risk, Chart ran a simultaneous deleveraging campaign. It sold the Roots industrial blower business to Ingersoll Rand for $300 million in cash, shed the American Fans division for $111 million, divested Cofimco for $80 million, and sold Cryo Diffusion and select European assets for additional proceeds, while managing the Howden integration. 

CEO Jill Evanko publicly committed that no share repurchases or material acquisitions would occur until leverage fell below 2.5x, essentially putting the company's credibility on a public schedule. Internally, a structured synergy program set $175 million in year-one cost savings and $150 million in year-one commercial synergies as the targets, with a three-year commercial synergy goal of $350 million. 

The acquisition would either validate Chart's energy transition gamble or leave it stranded with a debt load and a clean energy market still years from full commercialization.

Chart did not just hit its targets. It shredded them. Within the first year of Howden ownership, the company achieved $181.4 million in annualized cost synergies, exceeding the $175 million target a month ahead of schedule. 

Commercial synergies also reached $529.9 million in year one, 3.5x the $150 million target and exceeding even the original three-year goal of $350 million. By the third quarter of 2024, cost synergies had already surpassed $250 million, the company's original three-year target well ahead of schedule. 

All on one purchase order, Chart/Howden engineers could now pitch hydrogen fueling stations with integrated compression and cryogenic storage; carbon capture projects with both the heat exchanger and the liquefaction end; and LNG export facilities using Chart's IPSMR® process technology alongside Howden's compression train. Customers who'd been splitting these contracts across multiple vendors consolidated immediately.

Revenue grew from $1.6 billion in 2022 to $3.35 billion in 2023 to $4.16 billion in 2024, a 160% increase in two years. Adjusted EBITDA margins expanded to 24.4% in full-year 2024, up from roughly 16% pre-acquisition, driven in large part by the Repair, Service and Leasing (RSL) segment, which consistently ran above 43% gross margins and grew to represent approximately a third of revenue. 

The aftermarket strategy that Howden's installed base enabled was the margin the legacy Chart business had always lacked: thousands of Howden fans, blowers, and compressors installed globally, each requiring maintenance, spares, and service on a recurring schedule, regardless of whether new equipment orders were running hot or cold. Net leverage fell from 4.25x at closing to 3.35x by end of 2023 to 2.80x by end of 2024, with Chart targeting below 2.5x in 2025, all while the company paid down billions in debt and never needed to raise equity again.

End-market diversification arrived with the platform. Chart's commercial pipeline grew to over $23 billion in mid-2024, including over $5 billion in hydrogen-related opportunities and a rapidly expanding carbon capture pipeline. New demand (that hadn't been in the original gamble) emerged, with data centers seeking AI-driven cooling solutions, drawing on Chart's heat exchangers and blowers. This created an estimated $500 million addressable market per year just from 3 gigawatts of annual data center addition. 

ExxonMobil selected Chart's IPSMR® liquefaction technology for the 18 MTPA Rovuma LNG project in Mozambique. Customer concentration also fell, as their top-10 customer share dropped from 38% of revenue in 2022 to 26% in 2024 with the platform spread across more industries, geographies, and contract types. The order backlog reached a record $4.85 billion at year-end 2024, supported by a book-to-bill ratio of 1.40 in Q4 2024, signaling demand was still outpacing shipments.

The ultimate validation came on June 4, 2025, when Chart and Flowserve Corporation announced a $19 billion all-stock merger of equals, creating a comprehensive industrial process technology platform with $8.8 billion in combined revenue, $3.7 billion in annual aftermarket service revenue, and 5.5 million installed assets across 50+ countries. Chart shareholders, who watched the stock fall 57% on the Howden announcement in late 2022, will own approximately 53.5% of the combined entity. 

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$4.4 billion - Acquisition price for Howden

$181.4 million - Year-one annualized cost synergies achieved

24.4% - Adjusted EBITDA margin in 2024

$23 billion+ - Commercial pipeline as of mid-2024

$19 billion - Enterprise value of Chart-Flowserve merger

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