FORT WAYNE, Indiana (April 10, 2017) -- Franklin Electric Co., Inc. is expanding its groundwater distribution channel with the acquisition of three distributors in the U.S. professional groundwater market. The company announced it has purchased controlling interests in 2M Company Inc of Montana, Western Hydro Holding Corporation of California and Drillers Service of North Carolina for approximately $89 million.
According to a release, the 2M and Western Hydro transactions have closed, while the DSI acquisition is expected to close before the end of second quarter 2017.
“The specialized groundwater distribution channel in the U.S. through which we sell our products is an important element in the ultimate sale, support and specification to the installing contractors," Gregg Sengstack, Franklin Electric's Chairman and CEO, said. "Working in partnership with our distributors, Franklin Electric has developed a broad array of products and systems solutions that will only grow as regulatory and efficiency demands increase in North America."
With the acquisitions, Franklin Electric will now control the largest distribution entity in the industry. The company will now have sixty locations across the country and nearly 500 employees.
The acquired distributors will operate under Headwater Companies, LLC. DeLancey Davis, a former executive officer of Franklin Electric, has been named president of Headwater.
The new segment will have approximately $275 million of consolidated annual sales and is expected to be neutral to the 2017 adjusted earnings per share guidance of $1.77 to $1.87 the Company has provided. The earnings from the acquired companies are expected to add twelve to fourteen cents to Franklin Electric’s 2018 adjusted earnings per share, according to a release.