Pump and valve maker Pentair Plc announced on Monday the acquisition of electrical fastenings company Erico Global Co. including its debts for $1.8 billion, the New York Times reported.
The report stated that the deal, to be financed through internal cash and borrowings, is expected to boost Pentair's product offerings in its technical solutions business segment.
Citing Randall J. Hogan, the Pentair chairman and chief executive, the New York Times reported that the Erico acquisition complements Worsely, England-based company's business and will expand its presence in the commercial and industrial sectors.
"ERICO has a strong global business and valued brands, making it a perfect fit for Pentair. We have similar cultures and serve similar industries with complementary products, which will create a broader and stronger offering for our end users," Hogan said in the statement.
Reuters reported that the deal came after activist investor Nelson Peltz, who is the third largest investor in Pentair with a 7.2 percent stake as of June, pushed for the company to bulk up through acquisitions.
The New York Times said the deal still needs to be reviewed by regulators and is expected to be completed before the year ends.
Reuters reported Pentair's shares rose 1.3 percent to $62.46 in premarket trading on Monday and that company expects the acquisition to increase its 2016 earnings by more than 40 cents per share. The wire agency noted that analysts are projecting Pentair, whose shares have slid by 7 percent as of last Friday, to post $4.23 earnings per share in 2016.
Pentair manufactures equipment for a variety of industries such as mining, agriculture and telecommunications. It has 30,000 employees and booked $7 billion in revenues in 2014. Erico, based in Solon, Ohio, manufactures electrical and fastening products for use in electrical and mechanical devices, including telecommunications, fire protection, and heating and air-conditioning equipment. The privately held company employs 1,200 people in 30 countries, the New York Times said.
Goldman Sachs and the law firm Foley & Lardner advised Pentair, while JPMorgan Chase and the law firm Jones Day advised Erico.
