A. O. Smith to Acquire Leonard Valve for $470 Million

MILWAUKEE, WI — A. O. Smith Corporation, a global leader in water heating and treatment, announced it has signed a definitive agreement to acquire LVC Holdco LLC, parent company of Leonard Valve of Cranston, Rhode Island, for $470 million, subject to customary adjustments. The all-cash transaction is valued at approximately $412 million after estimated tax benefits and is expected to close in the first quarter of 2026, pending regulatory approvals and standard closing conditions.

The acquisition will be funded through a combination of cash on hand and committed debt financing. Based on projected 2026 performance, the purchase price represents an adjusted multiple of approximately 12 times forecasted EBITDA.

Expanding Presence in Water Management

Founded in 1911, Leonard Valve and its Heat-Timer brand are pioneers in commercial and institutional water control systems. Leonard leads in digital and thermostatic mixing valve technologies, while Heat-Timer specializes in advanced boiler controls that improve hydronic system efficiency. Their products are widely used in hospitals, schools, universities, and industrial facilities, where temperature precision and safety compliance are critical.

“This acquisition represents a compelling strategic fit and a meaningful expansion of A. O. Smith’s presence in the water management market,” said Steve Shafer, Chief Executive Officer of A. O. Smith. “Leonard’s rich history of engineering excellence and commitment to product quality are deeply aligned with A. O. Smith’s own culture and values. Leonard Valve’s and Heat-Timer’s products work seamlessly with our core water heating and boiler offerings, and this acquisition will allow us to deliver a more integrated, high-performance system through our established channels.”

Strategic Growth and Digital Integration

A. O. Smith said the acquisition strengthens its mechanical room portfolio and advances its connected water strategy by integrating Leonard’s digital mixing platforms and Heat-Timer’s smart control technologies. Together, the brands will expand A. O. Smith’s presence in commercial markets and enhance relationships with specifying engineers and facility operators.

The transaction also aligns with A. O. Smith’s disciplined acquisition framework, meeting key growth, margin, and return thresholds. The company expects the deal to be accretive to earnings per share in 2026, following one-time transaction costs, and to contribute strong free cash flow in subsequent years.

Shared Commitment to Innovation and Quality

“We are excited to join forces with A. O. Smith, whose commitment to innovation and operational excellence aligns perfectly with Leonard Valve’s core values,” said David Brakenwagen, Chief Executive Officer of Leonard Valve. “Together, we see significant opportunities to accelerate adoption of digital water-management technologies and deliver even greater value to our customers. A. O. Smith is a great home for Leonard Valve that will help our people and products reach new heights.”

Shafer added, “We look forward to welcoming Leonard Valve and its team to the A. O. Smith family. Both companies share a commitment to innovation, integrity, and exceptional customer service. By combining our strengths, we will continue to shape the future of water management with safer, smarter, and more sustainable solutions.”

Transaction Support

BofA Securities served as exclusive financial advisor to A. O. Smith Corporation, and Foley & Lardner LLP served as legal advisor.

For more information, visit www.aosmith.com.

Note: this release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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.

Note: this release was rewritten with help from generative AI.