Pentair is making a $1.4 billion bet on Taco Group Holdings, a move the Golden Valley-based water company says will bulk up its lineup in HVAC and data center infrastructure. The companies rolled out the deal Tuesday alongside Pentair's quarterly results and said they expect the transaction to close in the fourth quarter of 2026, pending customary approvals.
In a release carried by Business Wire, Pentair said the purchase price works out to roughly a 10.5x multiple of 2026E EBITDA and reflects about $165 million in tax benefits plus around $30 million in anticipated run-rate cost synergies. Taco is expected to generate about $540 million in revenue in fiscal 2026 with adjusted EBITDA margins above 20 percent. "This highly strategic and value creating acquisition enhances the scale and reach of Pentair’s innovative water solutions," Pentair President and CEO John L. Stauch said in the release.
On paper, Pentair is legally based in London, but its U.S. operations are run out of Golden Valley, Minnesota, according to the Minneapolis / St. Paul Business Journal. In a separate investor update, Pentair said second-quarter sales slipped as pool-channel partners worked through inventory destocking, but adjusted earnings landed slightly ahead of preliminary guidance. The company reported about $933 million in sales for the quarter, and StreetInsider carries the full Q2 release with reconciliations and presentation materials.
About Taco
Taco is a family-owned maker of hydronic and water-based HVAC components, including pumps, valves, tanks, heat exchangers and controls, with manufacturing and operations in North America and overseas, according to its website. Pentair said Taco will keep going to market under the Taco brand and will maintain a significant presence in Cranston, Rhode Island, where Taco’s headquarters sit, per the companies’ announcement. For more background, see Taco Comfort Solutions and the Business Wire release.
Deal terms and timeline
Pentair expects the transaction to be approximately $0.10 to $0.15 accretive to adjusted EPS in fiscal 2027 and is targeting about $30 million of run-rate cost synergies. The company said it plans to finance the purchase with cash on hand plus committed bridge financing, followed by permanent refinancing. Pentair expects net leverage of roughly 2.4x immediately after close and intends to complete the merger in the fourth quarter of 2026, subject to regulatory approvals and closing conditions. StreetInsider republishes the full announcement and financial details.
What to watch next
Pentair plans to host an investor call and webcast to run through second-quarter results and the Taco acquisition, with presentation slides and a replay slated to be posted on its investor relations site. Local suppliers and specifiers will be watching closely to see whether Pentair ramps up cross-selling of Taco products into commercial HVAC and data center projects as the market shifts. Details on the call and related materials are available at Pentair Investor Relations.
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