A. O. Smith Corporation (NYSE: AOS) has announced its definitive agreement to acquire LVC Holdco LLC (Leonard Valve) for $470 million, subject to adjustments. The all-cash transaction is valued at approximately $412 million after adjusting for estimated tax benefits and is expected to be funded through a combination of cash on hand and committed debt financing.
Leonard Valve, founded in 1911, is a leader in water management technologies, particularly in digital and thermostatic mixing valve technologies for commercial and institutional settings. Additionally, its Heat-Timer brand provides advanced boiler controls that optimize hydronic heating.
This acquisition is expected to be accretive to A. O. Smith's earnings per share in 2026, with strong growth, margins, and free cash flow generation. The purchase price, adjusted for the present value of the expected tax benefit, represents an adjusted multiple of approximately 12 times forecasted 2026 EBITDA.
A. O. Smith's CEO, Steve Shafer, sees this acquisition as a compelling strategic fit and a meaningful expansion of the company's presence in the water management market. He emphasized that Leonard Valve's and Heat-Timer's products work seamlessly with A. O. Smith's core water heating and boiler offerings, allowing the company to deliver a more integrated, high-performance system through its established channels.
The acquisition is expected to establish a new growth platform for A. O. Smith in the fast-growing water management category, accelerate its digital and connected water strategy, broaden its commercial exposure, and align with the company's disciplined acquisition framework, meeting key financial thresholds.
BofA Securities served as the exclusive financial advisor, and Foley & Lardner LLP served as the legal advisor to A. O. Smith Corporation in this acquisition. The market has reacted to these announcements by moving the company's shares -0.57% to a price of $65.79. Check out the company's full 8-K submission here.
