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A. O. Smith Acquires Pureit

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A. O. Smith (NYSE: AOS) has completed the acquisition of Pureit, a Unilever water purification business, for approximately $120 million. Pureit, launched in 2004 in Chennai, India, offers residential water purification solutions across India, Bangladesh, Sri Lanka, Vietnam, and Mexico. The acquisition strengthens A. O. Smith's premium water treatment portfolio and distribution footprint, particularly in e-commerce channels. The company notes that the acquisition will not materially impact earnings in the first year.

A. O. Smith (NYSE: AOS) ha completato l'acquisizione di Pureit, un'azienda di purificazione dell'acqua di Unilever, per circa 120 milioni di dollari. Pureit, lanciata nel 2004 a Chennai, India, offre soluzioni di purificazione dell'acqua per uso domestico in India, Bangladesh, Sri Lanka, Vietnam e Messico. L'acquisizione rafforza il portafoglio di prodotti di trattamento dell'acqua premium di A. O. Smith e la sua rete di distribuzione, in particolare nei canali di e-commerce. L'azienda fa notare che l'acquisizione non avrà un impatto significativo sugli utili nel primo anno.

A. O. Smith (NYSE: AOS) ha completado la adquisición de Pureit, un negocio de purificación de agua de Unilever, por aproximadamente 120 millones de dólares. Pureit, lanzado en 2004 en Chennai, India, ofrece soluciones de purificación de agua residencial en India, Bangladés, Sri Lanka, Vietnam y México. La adquisición fortalece el portafolio de tratamiento de agua premium y la huella de distribución de A. O. Smith, especialmente en los canales de comercio electrónico. La empresa señala que la adquisición no tendrá un impacto material en las ganancias durante el primer año.

A. O. Smith (NYSE: AOS)는 유니레버의 물 정화 사업인 Pureit을 약 1억 2천만 달러에 인수했다고 발표했습니다. Pureit은 2004년 인도 첸나이에서 시작되어 인도, 방글라데시, 스리랑카, 베트남, 멕시코 전역에 주거용 물 정화 솔루션을 제공합니다. 이번 인수는 A. O. Smith의 프리미엄 물 처리 포트폴리오와 특히 전자상거래 채널에서의 유통 네트워크를 강화합니다. 회사는 이번 인수가 첫 해에 수익에 큰 영향을 미치지 않을 것이라고 언급했습니다.

A. O. Smith (NYSE: AOS) a finalisé l'acquisition de Pureit, une entreprise de purification de l'eau de Unilever, pour environ 120 millions de dollars. Pureit, lancé en 2004 à Chennai, en Inde, propose des solutions de purification de l'eau pour les ménages en Inde, au Bangladesh, au Sri Lanka, au Vietnam et au Mexique. Cette acquisition renforce le portefeuille de traitement d'eau premium d'A. O. Smith et son réseau de distribution, en particulier dans les canaux de commerce électronique. L'entreprise indique que cette acquisition n'aura pas d'impact significatif sur les bénéfices au cours de la première année.

A. O. Smith (NYSE: AOS) hat die Übernahme von Pureit, einem Unternehmen von Unilever zur Wasseraufbereitung, für etwa 120 Millionen Dollar abgeschlossen. Pureit wurde 2004 in Chennai, Indien, gegründet und bietet Lösungen zur Wasseraufbereitung für Haushalte in Indien, Bangladesch, Sri Lanka, Vietnam und Mexiko an. Die Übernahme stärkt das Premium-Wasserbehandlungsportfolio und die Vertriebsstruktur von A. O. Smith, insbesondere im E-Commerce-Bereich. Das Unternehmen weist darauf hin, dass die Übernahme im ersten Jahr keine wesentlichen Auswirkungen auf die Erträge haben wird.

Positive
  • Strategic acquisition expanding market presence in key Asian markets
  • Enhancement of e-commerce distribution channels
  • Diversification of product portfolio in water treatment segment
  • Established brand acquisition with operations since 2004
Negative
  • No material earnings contribution expected in first year
  • $120 million cash expenditure for acquisition

Insights

The $120 million acquisition of Pureit represents a strategic move to expand A.O. Smith's footprint in high-growth emerging markets, particularly India. The deal strengthens their water treatment portfolio and diversifies distribution channels through e-commerce integration. While the acquisition is relatively modest at about 1.1% of AOS's market cap, it provides significant growth potential in markets with rising middle-class populations and increasing demand for water purification solutions.

The immediate neutral earnings impact suggests careful integration planning, but the long-term value proposition is compelling given Pureit's established presence across multiple emerging markets and their complementary product portfolio. The deal aligns with global trends toward clean water access and positions AOS to capture market share in regions with substantial growth potential.

This acquisition strategically positions AOS in the rapidly growing Asian water purification market, where urbanization and rising health consciousness are driving demand. India's residential water purifier market alone is projected to grow at a CAGR of 15-20% through 2025. Pureit's established presence in key emerging markets like India, Bangladesh and Vietnam provides AOS with immediate market access and a recognized brand name.

The e-commerce capabilities gained through this acquisition are particularly valuable, as digital sales channels in these markets are experiencing accelerated growth. The deal's structure and timing suggest a well-planned entry strategy into markets where premium water treatment solutions are increasingly in demand.

MILWAUKEE, Nov. 1, 2024 /PRNewswire/ -- Global water technology company A. O. Smith Corporation (the "Company") (NYSE: AOS) today announced it has completed its acquisition of Pureit, a Unilever PLC business at a purchase price of approximately $120 million, subject to customary adjustments. Pureit offers a broad range of residential water purification solutions, primarily in India.

"Pureit complements our premium brands in the market and their strength in e-commerce will allow us to expand our presence in that channel," said Kevin J. Wheeler, the Company's chairman and chief executive officer. "This acquisition aligns with our strategy of adding scale and enhances our premium water treatment product portfolio and distribution footprint."

Pureit was first launched in 2004 in Chennai, India, to provide accessible and safe drinking water to the fast-growing populations of South Asia, and beyond. Today Pureit is a leading water purification business operating in India, Bangladesh, Sri Lanka, Vietnam and Mexico, among other markets, with a diversified product offering across devices, filters and spares.

The agreement to acquire Pureit was announced earlier this year and the acquisition will not have a material impact on earnings in the first year. Click here to view release.

Forward-looking Statements

This release contains statements that the Company believes are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "forecast," "continue," "guidance," "outlook" or words of similar meaning. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: further softening in U.S. residential and commercial water heater demand; negative impacts to the Company, particularly the demand for its products, resulting from global inflationary pressures or a potential recession in one or more of the markets in which the Company participates; the Company's ability to continue to obtain commodities, components, parts and accessories on a timely basis through its supply chain and at expected costs; negative impacts to demand for the Company's products, particularly commercial products, as a result of changes in commercial property usage that followed the COVID-19 pandemic; further weakening in North American residential or commercial construction or instability in the Company's replacement markets; inability of the Company to implement or maintain pricing actions; inconsistent recovery of the Chinese economy or a further decline in the growth rate of consumer spending or housing sales in China; the availability, timing or effects of China stimulus programs; negative impact to the Company's businesses from international tariffs, trade disputes and geopolitical differences, including the conflicts in Ukraine, the Middle East and attacks on commercial shipping vessels in the Red Sea; potential further weakening in the high-efficiency gas boiler segment in the U.S.; substantial defaults in payment by, material reduction in purchases by or the loss, bankruptcy or insolvency of a major customer; foreign currency fluctuations; the Company's inability to successfully integrate or achieve its strategic objectives resulting from acquisitions;  failure to realize the expected benefits of acquisitions or expected synergies; competitive pressures on the Company's businesses, including new technologies, new competitors and the timing and impact of regulatory changes; the impact of potential information technology or data security breaches; negative impact of changes in government regulations or regulatory requirements; the inability to respond to secular trends toward decarbonization and energy efficiency; and adverse developments in general economic, political and business conditions in key regions of the world. Additional factors are discussed in the Company's filings with Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2023, quarterly reports on Form 10-Q and current reports on Form 8-K. Forward-looking statements included in this news release are made only as of the date of this release, and the Company is under no obligation to update these statements to reflect subsequent events or circumstances. All subsequent written and oral forward-looking statements attributed to the Company, or persons acting on its behalf, are qualified entirely by these cautionary statements.

About A. O. Smith

Celebrating its 150th year of business, A. O. Smith Corporation, with headquarters in Milwaukee, Wisconsin, is a global leader applying innovative technology and energy-efficient solutions to products manufactured and marketed worldwide. Listed on the New York Stock Exchange (NYSE: AOS), the Company is one of the world's leading manufacturers of residential and commercial water heating equipment and boilers, as well as water treatment products. For more information, visit www.aosmith.com.

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SOURCE A. O. Smith Corporation

FAQ

How much did A. O. Smith (AOS) pay for Pureit acquisition?

A. O. Smith paid approximately $120 million for the Pureit acquisition, subject to customary adjustments.

What markets does Pureit operate in after A. O. Smith's acquisition?

Pureit operates in India, Bangladesh, Sri Lanka, Vietnam, Mexico, and other markets.

When was Pureit originally launched before A. O. Smith's acquisition?

Pureit was first launched in 2004 in Chennai, India.

Will the Pureit acquisition impact A. O. Smith's (AOS) earnings in 2024?

The acquisition will not have a material impact on A. O. Smith's earnings in the first year.

A.O. Smith Corporation

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