Fort Worth, Texas-based MORSCO announced today it has finalized the acquisition of Fortiline Waterworks, a portfolio company of CHS Capital and one of the largest waterworks distributors in the United States.
Fortiline will act as MORSCO’s waterworks distribution platform.
“There is great correlation between plumbing, HVAC and waterworks,” MORSCO CEO Chip Hornsby told Supply House Times. “We are a significant regional player on the plumbing side and we’re growing our HVAC business across the Sun Belt. Waterworks was a big gap and Fortiline significantly fills that gap.”
Hornsby added Fortiline’s locations are in sync with MORSCO’s footprint, including its recent expansion into the Southeast with acquisitions of Murray Supply and DeVore & Johnson.
“Fortiline has a very sound footprint across the Southeast and as far west as Texas,” he said. “They complement our strategy very well. We are getting that third leg to the stool so to speak and the acquisition provides diversification across the Sun Belt.”
Hornsby said current MORSCO standalone waterworks branches in Houston and San Antonio, Texas, and Phoenix, will be re-branded as Fortiline locations. He added there may be some instances where smaller MORSCO branches will still have combined elements of plumbing, HVAC and waterworks products in those locations.
Hornsby noted Mike Swedick will remain president and CEO of Fortiline, which will continue to operate as a standalone company responsible for waterworks supplies distribution inside MORSCO.
“We are extremely excited about Fortiline’s leadership team led by Mike Swedick,” he said. “Most important in any acquisition is the quality, caliber, and core values of the team. Fortiline has built an extremely successful and strong team. We look forward to working with them to provide opportunities for growth of both the business and individuals.”
In terms of that growth, Hornsby sees the waterworks industry continuing to provide opportunities in the short-term and long-term.
“Waterworks is not as large a sector as plumbing or HVAC from an annual spend standpoint, but we see the growth continuing with private new construction and especially with public repair and enhancement of existing waterworks infrastructure,” he said. “It’s hard not to envision our country investing significantly in water infrastructure upgrades and replacements with items such as water mains, and storm and sewage drainage being at the forefront.”
Looking ahead, Hornsby confirmed MORSCO is still in expansion mode. “Fortiline was a large acquisition and we want to get it integrated and situated,” he said. “This will complete our acquisitions for 2016, but we’ll start to envision where we want to be in 2017 and 2018.”
He did confirm MORSCO has no current plans to become a national distributor. “It’s not part of our strategy,” he said. “I’m not saying never, but to be in all 50 states is not a significant component of ours. We want to continue to fill in the Sun Belt where we see continued growth. We feel there are many opportunities where we are today and we will fill in accordingly.”
Fortiline operates 42 waterworks branches that extend from Florida to Texas. This acquisition boosts MORSCO’s footprint to 172 total branches.
MORSCO, prior to this acquisition, was No. 13 on the 2016 Supply House Times Premier 150 distributor rankings list.