Pentair to Acquire Taco Group Holdings in $1.4B Deal
Why It Matters
- The acquisition reflects ongoing consolidation within the HVAC and water technology industries, making it important for contractors to stay informed about supplier relationships, product portfolios, and future technology developments that may affect their businesses.
- The deal underscores the growing importance of data center cooling, a rapidly expanding market that is creating new revenue opportunities for HVAC contractors with commercial expertise.
- Expanded distribution and manufacturer representative networks could improve product availability and support, giving contractors access to a wider range of solutions and technical resources.
LONDON & CRANSTON, Rhode Island — Pentair plc announced that it has entered into a definitive agreement to acquire Taco Group Holdings for approximately $1.4 billion, subject to customary adjustments, expanding its portfolio of hydronic and water-based heating, ventilation, and air conditioning solutions while increasing its presence in commercial, industrial, residential, and mission-critical infrastructure markets.
Taco is a provider of hydronic and water-based solutions serving the HVAC, data center, commercial, industrial, and residential sectors. Its portfolio includes pumps, valves, tanks, heat exchangers, and advanced controls.
"This highly strategic and value-creating acquisition enhances the scale and reach of Pentair's inovative water solution serving high-growth comercial and industrial end-markets, including HVAC and data centers," said John L. Stauch, Pentair president and CEO. "The addition of Taco will provide Pentair with a more comprehensive suite of solutions and enhance development
capabilities to benefit our customers across commercial, industrial, and residential applications. We are confident in our ability to unlock significant profitability as we scale Taco, accelerate its growth across commercial markets and implement the Pentair Business System. We look forward to welcoming the Taco team to Pentair, ushering in a new chapter of growth and value creation."
"This partnership with Pentair allows us to accelerate our growth, expand our capabilities and further invest in our innovation and technology. It will also allow us to preserve our values, expertise and customer relationships, which have made Taco successful," said John Hazen White, Jr., owner and chairman of the board, and Benjamin White, president of Taco.
Pentair said Taco's installed base also expands its access to aftermarket opportunities, including replacement products, maintenance, and system upgrades.
Additionally, Pentair also expects the transaction to create additional opportunities through complementary distribution channels and manufacturer representative networks serving contractors, distributors, engineers, original equipment manufacturers, and end users.
Taco is expected to generate approximately $540 million in fiscal year 2026 revenue. Pentair said the business is expected to produce adjusted EBITDA margins above 20% when including anticipated run-rate cost synergies.
The company expects the acquisition to be approximately $0.10 to $0.15 accretive to adjusted earnings per share in fiscal year 2027. Pentair also anticipates approximately $30 million in run-rate cost synergies through supply chain and operational efficiencies.
The transaction is expected to close during the fourth quarter of 2026, subject to customary closing conditions and regulatory approvals. Pentair plans to finance the acquisition through a combination of cash on hand and committed bridge financing that it intends to refinance through a permanent debt issuance.
Following the close of the transaction, Taco will become part of Pentair's Water Solutions reportable segment and will continue operating under the Taco brand. The company also plans to maintain a significant presence in Cranston, Rhode Island.