Plumbing supplies giant Reliance Worldwide has bought UK plastic fittings manufacturer John Guest for $1.22 billion, to become the second Australian firm in the sector to make an overseas acquisition this month.
Reliance says it has entered into an unconditional agreement to buy UK-based group John Guest as part of its plan to significantly increase its offshore footprint.
The deal comes just weeks after another Australian plumbing products supplier, Reece, said it was buying Texas-based Morsco so it can tap into the fast-growing markets of the southern United States.
Reliance chief executive officer Heath Sharp said John Guest’s strength in the UK and continental Europe will combine with Reliance’s strong positions in North America and Asia Pacific regions.
“We believe that John Guest products can be successfully leveraged through our well established North American and Asia Pacific channel network,” he said.
He said they can also use John Guest’s distribution channels in the UK and Europe to sell Reliance products and some products from the group’s recent acquisition of Holdrite.
Reliance will partially fund the acquisition of the privately held John Guest through a $1.1 billion equity offering.
The deal is expected to be completed in June and Reliance has maintained its full-year earnings guidance range of between $150 million and $155 million, excluding the John Guest transaction costs.