The company's purchase of Manitowoc Ice business for a net price of $1.38 billion strengthens its commercial water franchise and should be meaningfully accretive to margins, states Linzey.
Pentair recently agreed to acquire Manitowoc Ice, a provider of commercial ice makers from Welbilt, Inc (NYSE:WBT), for $1.6 billion or a net transaction value of ~$1.38 billion (adjusted for after-tax benefit).
The company expects to fund the acquisition with new debt anticipated to be investment grade. The transaction is expected to close in 2Q22.
Manitowoc Ice generated $308 million in revenue in 2021 with EBITDA margins of ~30%.
Manitowoc Ice employs more than 800 team members and operates facilities in Manitowoc, Wisconsin, Monterrey, Mexico, and Hangzhou, China.
Not including Manitowoc Ice, Pentair reiterated its FY22 and 1Q22 guidance. It expects the transaction to add ~$0.25 of Adjusted EPS accretion in 2023 and ~$0.40 in 2025.
It also expects EBITDA margins of 30%+ for Manitowoc Ice, significant revenue synergies, and accelerated deleveraging based on strong free cash flow.
Pentair plans to have Manitowoc Ice operate within its Water Solutions platform of the Consumer Solutions business segment.