Pentair (PNR) has signed an all-cash deal worth $225 million to acquire Pleatco, a manufacturer of water filtration and clean-air technologies for pool, spa and industrial air customers. Shares of the company gained 2.4% on Wednesday to close at $77.77.
The transaction is expected to close in the fourth quarter of 2021, subject to necessary regulatory approvals, including expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
With this acquisition, Pentair will have access to an expanded range of replacement filter products to be sold through Pleatco’s distribution channels.
Markedly, Pentair expects Pleatco to generate about $95 million of annual revenue in 2021. Also, the deal is expected to be accretive in its first full year. (See Pentair stock chart on TipRanks)
The President and CEO of Pentair, John Stauch, said, “We are excited to expand our presence in the aftermarket filtration space with an enhanced product offering that advances our objective to offer an effortless pool experience for consumers.”
Following the deal announcement, Rosenblatt Securities analyst Scott Graham maintained a Buy rating on Pentair with a price target of $95 (upside potential of 22.2%).
Graham said, “Pleatco looks like a very nice strategic fit, offers sales and cost synergies and will be purchased at a reasonable multiple.”
The stock has a Moderate Buy consensus rating Based on 6 Buys, 2 Holds and 3 Sells. The average Pentair price target of $79.36 implies 2% upside potential from current levels. Shares have gained 69.5% over the past year.
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