Watts Water Technologies to acquire AERCO International for $264.5m

US-based Watts Water Technologies has signed a deal to buy AERCO International for $264.5m to expand its product offerings to include high-efficiency boilers and hot-water heaters.

Based in Blauvelt, New York, AERCO International, a unit of Riverside Company, is a supplier of rapid water heating products, including commercial boilers and water heating equipment.

The definitive agreement between the two US companies involved an all-cash transaction, under which Watts will buy 100% of AERCO’s share capital on a debt/cash-free basis.

The acquisition is expected to be concluded by the end of 2014.

The customary net working capital adjustments and the closing conditions for the deal have not yet been finalised.

Watts Water Technologies CEO Robert J. Pagano Jr. said: "Acquiring AERCO will allow us to expand our product breadth to the strategically important adjacency of heat and hot-water offerings.

"AERCO is a recognised leader in the fast-growing market for high-efficiency boilers and hot-water heaters, with solid operating margins and attractive opportunities to continue its strong growth.

"AERCO’s products complement our existing portfolio, strengthening our ability to provide a total solution for our customers.

"With our existing international footprint, we also anticipate expanding AERCO’s worldwide presence."