Pentair Signs Agreement to Acquire Erico Global Company

21.08.2015

Pentair plc announced that it has entered into an agreement with Erico Global Company whereby Pentair will acquire Erico for $1.8 billion in cash, including the repayment of Erico debt. The transaction values Erico at approximately twelve times 2015 forecasted EBITDA.

The transaction, which is anticipated to be completed in 2015 and subject to customary closing conditions and necessary regulatory approvals, is expected to add greater than $0.40 to 2016 adjusted earnings per share. Pentair plans to fund the transaction with a combination of cash and investment grade financing.

Based in Solon, Ohio, Erico is a leading global manufacturer and marketer of superior engineered electrical and fastening products for electrical, mechanical and civil applications. Erico has 1,200 employees in 30 countries with recognized brands including Caddy fixing, fastening and support products; Erico electrical grounding, bonding and connectivity products; and Lenton engineered systems.

The addition of Erico will strengthen Pentair s business by broadening its product offering and enabling the combined company to provide more global solutions to its end users. Erico will become a key growth platform within Pentair s Technical Solutions reporting segment.

"The addition of Erico s complementary business will expand our presence in the commercial and industrial sectors," said Randall J. Hogan, Pentair Chairman and CEO. "Erico has a strong global business and valued brands, making it a perfect fit for Pentair. We have similar cultures and serve similar industries with complementary products, which will create a broader and stronger offering for our end users. Importantly, this transaction reflects Pentair s disciplined acquisition strategy and our ability to identify well-managed companies that complement our product portfolio and strengthen growing areas of our business."

"Erico is pleased to join Pentair," said Bill Roj, Chairman of Erico. "The merger with Pentair will allow Erico to build on its strengths within an organization that is a comfortable cultural fit while benefiting from Pentair s advantaged capital structure. The combination will result in tremendous global opportunities to expand sales and better serve the companies shared industries."

Goldman, Sachs & Co. is serving as financial advisor to Pentair and Foley & Lardner LLP is providing legal counsel. J.P. Morgan is serving as financial advisor to Erico and Jones Day is providing legal counsel.

Source: Pentair plc.

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