A. O. Smith announced it has signed a definitive agreement to acquire Lebanon, TN-based Lochinvar.
A. O. Smith Corp.today
announced it has signed a definitive agreement to acquire Lebanon, TN-basedLochinvar
Corp.for $418 million and will not assume Lochinvar’s existing debt.
a privately held manufacturer of high-efficiency commercial and residential boilers
used in hydronic heating and hot water applications. The transaction is
expected to close in the third quarter of 2011, subject to customary closing
conditions and regulatory review.
acquisition fits squarely within our stated strategy to expand our core product
offering with new technologies, which emphasize high-efficiency products that
can be applied globally,” saidPaul W. Jones, chairman and CEO
of A. O. Smith. “This is a significant first step in growing our
diversified global water heating platform and the beginning of the redeployment
of the proceeds from the sale of our Electrical Products Company.”
“The addition of Lochinvar expands our product offering and
gives us access to proven high-efficiency boiler technology,” saidAjita
G. Rajendra, president of A. O. Smith Water Products Co. “The
$1.1 billion North American boiler industry is in the midst of a transition to
the new high-efficiency condensing technology, which we believe is growing
several times faster than GDP,” he continued. “We expect high-efficiency
boiler products to continue to grow at an accelerated rate for the foreseeable
mentioned significant growth opportunities in regions outside of North America,
especially in China, in regards to Lochinvar’s higher-efficiency boilers, as
more commercial customers seek ways to save energy and reduce operating costs. “This
opportunity becomes even more compelling when we couple Lochinvar’s leading
technology with A. O. Smith’s many years of experience, strong water heater
manufacturing platform and prominent brand in China,” he said.
product offerings are highly complementary to A. O. Smith’s and include:
residential and commercial high-efficiency condensing and non-condensing
boilers, residential and commercial water heaters, indirect water heaters,
storage tanks, solar thermal commercial water heaters, and commercial and
residential pool and spa heaters.
also includes Lochinvar Ltd., the company’s UK-based subsidiary.
information about the acquisition,read