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Europe: Pentair to buy Erico for US$1.8B

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Pentair has signed an agreement to acquire Erico Global Company for US$1.8 billion in cash, including the repayment of Erico debt.

The transaction values Erico at approximately 12 times 2015 forecasted EBITDA.

The transaction, which is anticipated to be completed in 2015 and subject to customary closing conditions and necessary regulatory approvals, is expected to add greater than US$0.40 to 2016 adjusted earnings per share.

Pentair plans to fund the transaction with a combination of cash and investment grade financing.

Based in Solon, Ohio, US, Erico is a global manufacturer and marketer of superior engineered electrical and fastening products for electrical, mechanical and civil applications.

It has 1,200 employees in 30 countries with brands including Caddy fixing, fastening and support products; Erico electrical grounding, bonding and connectivity products; and Lenton engineered systems.

The addition of Erico will strengthen Pentair’s business by broadening its product offering and enabling the combined company to provide more global solutions to its end users.

ERICO will become a key growth platform within Pentair’s Technical Solutions reporting segment.