Watts Water Technologies Makes Multiple Acquisitions
Watts Water Technologies made a series of significant acquisitions both domestically and overseas in November and December. In reverse chronological order, the company acquired: Dormont Manufacturing Co. On Dec. 9, Watts Water Technologies signed a definitive agreement to acquire Dormont in a stock purchase transaction. Under the terms of the purchase agreement, Watts will pay $94.5 million in cash to purchase all of Dormont's outstanding stock and the land on which its manufacturing facility is located, subject to a post-closing working capital adjustment. Dormont is a provider of flexible stainless steel connectors for natural and liquid propane gas connectors used in residential and commercial applications, with annual revenue for 2005 estimated at about $56.5 million. The acquisition was expected to close by Dec. 31, 2005, subject to customary closing conditions. “Dormont provides us access to several new channels of distribution while allowing us to offer a broader product line to our existing professional contractor customer base,” Patrick S. O'Keefe, CEO of Watts Water Technologies, said in a statement. The FEBCO, Mueller Steam Specialty and POLYJET product lines from SPX Corp. On Dec. 2, Watts said it acquired the three businesses, which have combined annual revenues of about $57 million, in a stock purchase transaction. FEBCO manufactures backflow prevention valves and has a strong presence in both residential and commercial landscape irrigation. Mueller Steam Specialty supplies pipeline strainers and check valves. This acquisition will enable Watts to expand into large diameter commercial strainers. Prior to this, Watts had offered small diameter strainers for plumbing applications. POLYJET provides Watts with entry into sleeve valve products. POLYJET's customized sleeve valves are used in severe service applications to provide precise flow and pressure control. Flexflow Tubing LLP. Watts' Canadian subsidiary, Watts Industries (Canada) Inc., acquired Flexflow, located in Langley, British Columbia, Canada, in an asset purchase transaction Nov. 7. Flexflow was established in 2005 but has an experienced management and production team, the company said. O'Keefe noted that this move allows the company to expand its presence in the PEX market by increasing its technical knowledge and manufacturing capacity. “The acquisition of Flexflow is consistent with our strategy to increase our presence in the under floor radiant heating and potable water markets,” O'Keefe said in a statement. Changsha Valve Works. On Nov. 4 Watts said it signed a definitive agreement to acquire the assets and business of Changsha Valve Works, located in Changsha, China, which manufactures large diameter hydraulic actuated butterfly valves for thermo-power and hydro-power plants, water distribution projects and waterworks projects. This acquisition is expected to close by the end of January 2006, subject to various closing conditions, including the approval of the government of the People's Republic of China and certain local government approvals, and the establishment and licensing of a new wholly foreign-owned enterprise by Watts. Changsha Valve, founded in 1958, has about 385 employees and annual revenue of about $8 million. “Changsha Valve Works is one of the leading companies addressing the waterworks and water distribution markets in China,” O'Keefe said in a statement. “It comes to us with a well-known brand name and a significant level of technical expertise. We believe that Changsha's direct sales force in conjunction with this expertise will provide many opportunities over the coming years to serve this fast-growing market.”
“This transaction will enable Watts to offer a broader product line, improve operating efficiencies and provide better customer service,” O'Keefe said in a statement.
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