ZWS - Zurn Water Solutions and Elkay Manufacturing to combine in all-stock transaction

Zurn Water Solutions (NYSE:ZWS) trades 3% higher premarket after it reached a definitive agreement with Illinois-headquartered Elkay Manufacturing to combine the businesses in an all-stock transaction valued at $1.56B; Elkay is a highly attractive and growing commercial drinking water solutions business. Under transaction terms, Elkay shareholders will receive up to 52.5M Zurn shares; transaction value represents 14.2x its forecasted 2022 adj. EBITDA, or 9.8x after factoring in forecasted run-rate cost synergies. On transaction completion, Zurn Water Solutions shareholders will own ~71% and Elkay shareholders will own the remaining of the combined and newly named company – Zurn Elkay Water Solutions. Zurn and Elkay will also provide our customers the capability to advance their ESG initiatives while reducing their overall initial and operating costs while providing a safe, clean environment for students, patients, patrons, and people within the public and private spaces they operate. The combination leads to an estimated $50M of cost synergies

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Zurn Water Solutions and Elkay Manufacturing to combine in all-stock transaction