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CSW Industrials Expands Green Plumbing Portfolio with $40M PF Waterworks Acquisition

Sophia Hughes016 mins
CSW Industrials Expands Green Plumbing Portfolio with M PF Waterworks Acquisition




CSW Industrials (CSWI) has announced the $40 million acquisition of PF Waterworks, LP, a company specializing in innovative, eco-friendly drain management solutions. The acquisition, funded with cash on hand, represents approximately 9.5x PF Waterworks’ trailing twelve-months’ EBITDA. This strategic move within CSWI’s Contractor Solutions Segment expands their plumbing product portfolio and is expected to be accretive to earnings per share in the first full year of ownership. PF Waterworks develops and manufactures ‘Clean and Green’ plumbing products for residential and commercial applications, with certified technology for public health and safety.

CSW Industrials (CSWI) ha annunciato l’ di PF Waterworks, LP, un’azienda specializzata in soluzioni innovative e ecologiche per la gestione dei drenaggi. L’acquisizione, finanziata con liquidità disponibile, rappresenta circa 9.5x l’EBITDA degli ultimi dodici mesi di PF Waterworks. Questa mossa strategica all’interno del segmento Contractor Solutions di CSWI amplia il loro portafoglio di prodotti idraulici e si prevede che sia accretiva per gli utili per azione nel primo anno completo di proprietà. PF Waterworks sviluppa e produce prodotti idraulici ‘Clean and Green’ per applicazioni residenziali e commerciali, con tecnologia certificata per la salute e la sicurezza pubblica.

CSW Industrials (CSWI) ha anunciado la adquisición de 40 millones de dólares de PF Waterworks, LP, una empresa especializada en soluciones innovadoras y ecológicas para la gestión de desagües. La adquisición, financiada con efectivo disponible, representa aproximadamente 9.5x el EBITDA de PF Waterworks en los últimos doce meses. Este movimiento estratégico dentro del segmento Contractor Solutions de CSWI amplía su cartera de productos de fontanería y se espera que sea acretivo para las ganancias por acción en el primer año completo de propiedad. PF Waterworks desarrolla y fabrica productos de fontanería ‘Clean and Green’ para aplicaciones residenciales y comerciales, con tecnología certificada para la salud y la seguridad pública.

CSW Industrials (CSWI)는 생태 친화적인 혁신적 배수 관리 솔루션을 전문으로 하는 PF Waterworks, LP의 4천만 달러 인수를 발표했습니다. 현금으로 자금을 지원받은 이번 인수는 PF Waterworks의 최근 12개월 EBITDA의 약 9.5배에 해당합니다. CSWI의 계약자 솔루션 세그먼트 내에서의 이 전략적 조치는 배관 제품 포트폴리오를 확장하며, 소유 첫 해에 주당 수익에 긍정적인 영향을 줄 것으로 예상됩니다. PF Waterworks는 주거 및 상업용 애플리케이션을 위한 ‘Clean and Green’ 배관 제품을 개발 및 제조하며, 공공 보건 및 안전을 위한 인증 기술을 보유하고 있습니다.

CSW Industrials (CSWI) a annoncé l’ de PF Waterworks, LP, une entreprise spécialisée dans des solutions de gestion des drains innovantes et respectueuses de l’environnement. L’acquisition, financée avec des liquidités disponibles, représente environ 9,5 fois l’EBITDA de PF Waterworks au cours des douze derniers mois. Ce mouvement stratégique au sein du segment Contractor Solutions de CSWI élargit leur portefeuille de produits de plomberie et devrait être accrétif pour le bénéfice par action au cours de la première année complète de possession. PF Waterworks développe et fabrique des produits de plomberie ‘Clean and Green’ pour des applications résidentielles et commerciales, avec une technologie certifiée pour la santé et la sécurité publique.

CSW Industrials (CSWI) hat die Übernahme von PF Waterworks, LP für 40 Millionen Dollar bekannt gegeben, einem Unternehmen, das auf innovative und umweltfreundliche Lösungen im Bereich Abwassermanagement spezialisiert ist. Die Übernahme, die mit vorhandenen liquiden Mitteln finanziert wurde, entspricht etwa 9,5-fachem EBITDA von PF Waterworks in den letzten zwölf Monaten. Dieser strategische Schritt innerhalb des Contractor Solutions Segments von CSWI erweitert ihr Produktportfolio im Bereich Sanitär und wird im ersten vollen Jahr des Eigentums voraussichtlich akretiv für den Gewinn pro Aktie sein. PF Waterworks entwickelt und produziert ‘Clean and Green’-Sanitärprodukte für Wohn- und Gewerbeanwendungen mit zertifizierter Technologie für öffentliche Gesundheit und Sicherheit.

Positive


  • Acquisition expected to be accretive to earnings per share in first year


  • $40M acquisition funded with cash on hand, showing strong liquidity


  • Strategic expansion in existing plumbing market with synergistic potential


  • Addition of innovative, certified ‘Clean and Green’ product portfolio


  • Shared customer base indicates immediate market integration potential


Negative


  • Significant capital outlay at 9.5x EBITDA multiple


  • Future earn-out payments may increase total acquisition cost


Insights


The $40 million acquisition of PF Waterworks represents a strategic expansion in CSWI’s plumbing segment at a reasonable valuation of 9.5x EBITDA. The deal metrics are attractive given the current market conditions and industry standards. This acquisition is particularly noteworthy as it’s expected to be earnings accretive in the first year, indicating strong potential for immediate value creation.

The transaction, funded with cash on hand, demonstrates CSWI’s robust financial position and disciplined capital allocation strategy. Since going public in 2015, CSWI has deployed $695 million in acquisitions, showing a consistent track record of inorganic growth. The focus on eco-friendly, innovative products in the plumbing sector positions CSWI well for future growth, particularly given increasing environmental regulations and consumer preferences for sustainable solutions.

The strategic fit of PF Waterworks within CSWI’s portfolio is compelling, with significant cross-selling opportunities through shared customers. The ‘Clean and Green’ focus aligns with growing market demand for environmentally conscious plumbing solutions. The residential and commercial applications provide diversified revenue streams and market exposure.

The existing relationship between CSWI management and PF Waterworks suggests smooth integration potential and reduced execution risk. The certification for public health and safety adds credibility and market access advantages. This acquisition strengthens CSWI’s competitive position in the plumbing end market, which has proven resilient through economic cycles.












Investment Highlights

  • Capital investment of $40 million for acquisition of PF Waterworks, LP, which offers innovative, eco-friendly drain management solutions
  • Valuation represents approximately 9.5x PF Waterworks’ trailing twelve-months’ EBITDA
  • Expected to be accretive to earnings per share in the first full year of ownership
  • $695 million of cumulative acquisition capital investment since going public in October 2015

DALLAS, Nov. 07, 2024 (GLOBE NEWSWIRE) — CSW Industrials, Inc. (Nasdaq: CSWI) today announced the strategic acquisition of PF Waterworks, LP, deploying $40 million. This additional acquisition in our Contractor Solutions Segment represents the Company’s commitment to allocate capital on a risk adjusted returns basis for innovative products which add vitality to our portfolio of products. CSWI funded the transaction with cash on hand.

Joseph B. Armes, Chairman, President, and Chief Executive Officer of CSW Industrials, said, “I am pleased to announce the acquisition of PF Waterworks, which is a synergistic acquisition within our existing plumbing end market, where we have opportunity for expansion. The addition of these new products to our portfolio expands our offering of innovative plumbing products and further fuels the opportunity for additional inorganic growth and market share gains.”

Jeff Underwood, Senior Vice President of CSWI and General Manager, Contractor Solutions, commented, “We are thrilled to bring the PF Waterworks team to the CSWI family. I have known the company and owner for a number of years and watched PF Waterworks grow into a sizeable supplier to a number of shared customers based on product innovation and service, which are core values at CSWI.”

PF Waterworks develops and manufactures revolutionary, problem-solving plumbing products targeting ‘Clean and Green’ for both residential and commercial applications. The advanced, proven technology used in these products is certified for public health and safety and provides dependable performance that promotes self-sufficiency and makes life easier for homeowners, contractors, property managers, and builders. PF Waterworks sets a new industry standard in drain management products while providing excellent value for partners and customers.

The $40 million of capital for the acquisition of PF Waterworks, including estimated working capital adjustments but excluding future earn-outs, represents a valuation of approximately 9.5x PF Waterworks’ trailing twelve-month adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).

Safe Harbor Statement
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Words or phrases such as “may,” “should,” “expects,” “could,” “intends,” “plans,” “anticipates,” “estimates,” “believes,” “forecasts,” “predicts” or other similar expressions are intended to identify forward-looking statements, which include, without limitation, earnings forecasts, effective tax rate, statements relating to our business strategy and statements of expectations, beliefs, future plans and strategies and anticipated developments concerning our industry, business, operations, and financial performance and condition.

The forward-looking statements included in this press release are based on our current expectations, projections, estimates, and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties may cause actual results to differ materially from what is forecast in such forward-looking statements, and include, without limitation, the risk factors described from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K.

All forward-looking statements included in this press release are based on information currently available to us, and we assume no obligation to update any forward-looking statement except as may be required by law.

About CSW Industrials
CSW Industrials is a diversified industrial growth company with industry-leading operations in three segments: Contractor Solutions, Specialized Reliability Solutions, and Engineered Building Solutions. CSWI provides niche, value-added products with two essential commonalities: performance and reliability. The primary end markets we serve with our well-known brands include: HVAC/R, plumbing, electrical, general industrial, architecturally-specified building products, energy, mining, and rail transportation. For more information, please visit www.cswindustrials.com.

Investor Relations

Alexa Huerta
Vice President, Investor Relations, & Treasurer
214-489-7113
[email protected]









FAQ



How much did CSWI pay for PF Waterworks acquisition?


CSWI paid $40 million for the acquisition of PF Waterworks, LP, representing approximately 9.5x PF Waterworks’ trailing twelve-month EBITDA.


When will the PF Waterworks acquisition be accretive to CSWI’s earnings?


The acquisition is expected to be accretive to CSWI’s earnings per share in the first full year of ownership.


What type of products does PF Waterworks manufacture?


PF Waterworks develops and manufactures revolutionary ‘Clean and Green’ drain management solutions for both residential and commercial applications, with technology certified for public health and safety.


How did CSWI finance the PF Waterworks acquisition?


CSWI funded the PF Waterworks acquisition with cash on hand.





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