Watts Water acquiring Bradley Corporation for $303M

Watts Water has entered into a definitive agreement to acquire Bradley Corporation for $303M. The net transaction value is approximately $268M after adjusting for the estimated net present value of expected tax benefits of approximately $35M. The transaction will be funded through cash on hand and the remainder from Watts’ existing revolving credit facility. The transaction is subject to customary closing conditions and necessary regulatory approvals and is expected to close in Q4. Bradley is a provider and manufacturer of commercial washroom and emergency safety products serving commercial and industrial end markets for over 100 years. The company offers a comprehensive product portfolio that includes plumbing fixtures, washroom accessories and emergency safety products to a diverse customer base. Bradley has annual net sales of approximately $200M. Bryan Mullett, Bradley’s Chairman and CEO, will join Watts as President of Bradley, a new platform within Watts’ Americas region. The transaction is expected to be modestly accretive to Adjusted EPS in 2024 due to incremental interest expense and normal purchase accounting adjustments. The transaction value represents less than 8.0x forecasted 2023 proforma Adjusted EBITDA after factoring in expected run-rate cost synergies. Adjusted EBITDA margins expected to be accretive by 2027.