A. O. Smith Acquires Canada Water Heater Manufacturer Giant Factories, Inc.

Expands Presence in Canadian Market; offers a strong replacement demand opportunity

Posted Oct 19, 2021 at 3:00 PM MDT|Updated: 7 hours ago

MILWAUKEE, Oct 19, 2021 / PRNewswire / – Global water technology company AO Smith Corporation (the “Company”) (NYSE: AOS) announced today that it has acquired Giant Factories, Inc., a. known Canada-Based manufacturer of domestic and commercial water heaters, with a past twelve month turnover of approximately USD $ 105 million. The purchase price is approximately USD $ 192 million in cash, subject to customary adjustments. Taking into account an expected tax benefit of approx. $ 6.5 million which the company will achieve due to the tax treatment of the transaction as an acquisition of assets, and the expected operational synergies to be achieved over a period of two years, the purchase price is a multiple of approximately 9.5 x the adjusted forecast EBITDA for 2023 . Due to the normal adjustments to the purchase accounting, the acquisition is expected to be neutral until the fourth quarter of 2021 earnings per share and increase to earnings per share in the first full year after closing.

AO Smith Corporation logo. (PRNewsFoto / AO Smith Corporation) (PRNewsfoto / AO Smith Corporation)

This acquisition strengthens our leading position as a global supplier of domestic and commercial water heaters.

“The acquisition of Giant strengthens our leading position as a global supplier of domestic and commercial water heaters. The acquisition also supports our corporate strategy by adding our North America Market penetration, creating additional capacity and improving our sales capacity, “said Kevin J. Wheeler, Chairman and managing director. “With its rich history, established relationships and talented team, Giant’s values ​​and approach to business align with ours, and we look forward to welcoming Giant employees to the AO Smith family.”

Claude Lesage, President of Giant Factories, Inc. commented, “We are thrilled to have the benefits of a powerful combination with a world leader in global water technology. This natural and logical partnership with AO Smith will enhance the prospect for our customers, employees and suppliers to enhance.” . “

As a family company founded in 1945, Giant markets its water heaters under the Giant brand and employs more than 300 people, mainly in Canada. Giant has two locations in. Water heater Montreal and sells water heating products throughout Canada.

The addition of Giant to AO Smith’s existing water heating activities expands the company’s presence in the Canada Water heater market characterized by a high need for replacement.

The Giant acquisition also supports AO Smith’s decarbonization efforts by increasing the amount of water heating products in its portfolio that are powered by a renewable energy grid – Giant’s end markets are primarily served by a grid that is primarily hydropower and non-carbon intensive is .

AO Smith will publish its financial results for the third quarter of 2021 ahead of the market opening Thursday October 28th and host a webcast conference at 10 a.m. (eastern daylight time). Further details on the acquisition will be announced at this time.

Forward-Looking Statements
This press release contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. “Expect,” “intend,” “estimate,” “anticipate,” “believe,” “predict,” “continue,” “guide” or other words with similar meanings All forward-looking statements are subject to risks and uncertainties that may result We believe that actual results will differ materially from those anticipated on the date of this publication. Important factors that could cause actual results to differ materially from these expectations include: negative effects on the Company’s business, including demand for its Products, especially commercial products, relocation and disruption of operations and labor, disruption in the supply chain and liquidity due to the severity and duration of the COVID-19 pandemic; prolongation or deepening of supply chain bottlenecks; an uneven recovery in the Chinese economy or a decline in Growth rate of consumer spending or Im property sales in China; negative impact on the company’s business from international tariffs, trade disputes and geopolitical differences; potential slowdown in the US high efficiency boiler segment; significant volatility in material availability and prices; Inability of the company to implement or maintain pricing measures; failure to recover or further weaken US residential or commercial construction or instability in the Company’s replacement markets; Foreign currency fluctuations; the company’s inability to successfully integrate or achieve its strategic goals due to acquisitions; Competitive pressures on the company’s business; the impact of potential information technology or data security breaches; Changes in government regulations or requirements; and adverse developments in general economic, political and business conditions in key regions of the world. Forward-looking statements contained in this press release speak only as of the date of this press release, and the company undertakes no obligation to update these statements to reflect future events or circumstances. All subsequent written and oral forward-looking statements that are attributed to the company or persons acting on its behalf are completely restricted by these cautionary statements.

About AO Smith
AO Smith Corporation, based at Milwaukee, Wis., is a global leader applying innovative technologies 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 domestic and commercial water heating devices and boilers, as well as a manufacturer of water treatment products. More information is available at www.aosmith.com.

View original content to download multimedia:

SOURCE AO Smith Corporation

The above press release is courtesy of PRNewswire. The views, opinions, and statements contained in the press release are not endorsed by, nor do they necessarily reflect those of Gray Media Group, Inc.