International water expertise firm A. O. Smith Company (the “Firm” or “A. O. Smith”) (NYSE: AOS) introduced at present that it has signed a definitive settlement to amass LVC Holdco LLC (“Leonard Valve”) of Cranston, Rhode Island, for $470 million, topic to customary changes. The Firm expects the transaction to shut within the first quarter of 2026, topic to the satisfaction of customary closing circumstances and receipt of regulatory approvals. The all-cash transaction is valued at roughly $412 million after adjusting for estimated tax advantages and is anticipated to be funded by means of a mix of money readily available and dedicated debt financing. The acquisition value, adjusted for the current worth of the anticipated tax profit, represents an adjusted a number of of roughly 12 instances forecasted 2026 EBITDA.

Based in 1911, Leonard Valve, along with its Warmth-Timer model, is a pioneer in water administration applied sciences. Leonard Valve leads in digital and thermostatic mixing valve applied sciences, whereas Warmth-Timer supplies superior boiler controls that optimize hydronic heating. Collectively, their options guarantee secure, exact and environment friendly management of water temperature in industrial and institutional settings, together with hospitals, colleges, universities and industrial services, the place reliability and compliance with security requirements are important.

“This acquisition represents a compelling strategic match and a significant growth of A. O. Smith’s presence within the water administration market,” mentioned Steve Shafer, chief govt officer of A. O. Smith. “Leonard’s wealthy historical past of engineering excellence and dedication to product high quality are deeply aligned with A. O. Smith’s personal tradition and values. Leonard Valve’s and Warmth-Timer’s merchandise work seamlessly with our core water heating and boiler choices, and this acquisition will enable us to ship a extra built-in, high-performance system by means of our established channels.”

Compelling Strategic Match with A. O. Smith’s Development and Return Aims

• Establishes a brand new development platform within the fast-growing water administration class, increasing A. O. Smith’s presence throughout the mechanical room and complementing its core water heater and boiler companies.
• Accelerates A. O. Smith’s digital and related water technique by means of Leonard’s superior digital mixing expertise and the Warmth-Timer platform, creating main good water constructing administration functionality.
• Broadens industrial publicity, as Leonard Valve’s merchandise serve healthcare, schooling and industrial end-markets and additional enhances and strengthens relationships with specifying engineers.
• Aligns with A. O. Smith’s disciplined acquisition framework, assembly key monetary thresholds. After one-time buy accounting expenses {and professional} charges, A. O. Smith expects the transaction to be accretive to A. O. Smith’s earnings per share in 2026, with sturdy development, margins and free money move technology.

“We’re excited to affix forces with A. O. Smith, whose dedication to innovation and operational excellence aligns completely with Leonard Valve’s core values,” mentioned David Brakenwagen, chief govt officer of Leonard Valve. “Collectively, we see important alternatives to speed up adoption of digital water-management applied sciences and ship even better worth to our prospects. A. O. Smith is a good house for Leonard Valve that may assist our individuals and merchandise attain new heights.”

Shafer concluded, “We stay up for welcoming Leonard Valve and its group to the A. O. Smith household. Each firms share a dedication to innovation, integrity and distinctive customer support. By combining our strengths, we are going to proceed to form the way forward for water administration with safer, smarter and extra sustainable options.”

BofA Securities served as unique monetary advisor, and Foley & Lardner LLP served as authorized advisor to A. O. Smith Company.