Milwaukee-based A.O. Smith Corp. announced today it has acquired Groveport, Ohio-based supplier William R. Hague Inc. for $44.5 million in cash.
The deal, which is at a multiple of about 8x EBITDA, also includes a potential earn out for the sellers, Robert and David Hague, of up to $2 million, pending revenue growth over the next two years.
William R. Hague Inc. does business as Hague Quality Water International, manufacturing water softener products under the Hague, WaterBoss and WaterMax brands. It has about 100 employees and had about $28 million in revenue over the trailing 12 months ended June 30, $3 million of which came from A.O. Smith. Robert Hague, president and chief executive officer, and David Hague, chief financial officer, will continue to lead the business.
A.O. Smith, a global water technology company, reported revenue of $738.2 million and net income of $92.4 million in the second quarter. The company does not expect its acquisition of Hague will impact earnings per share this year.
With the acquisition of Hague, A.O. Smith expects to expand its residential water treatment line, enhance its business in China and broaden its water treatment sales channels. A.O. Smith said it does not expect to make any immediate changes in the integration of Hague.
“The acquisition of Hague squarely fits within our stated strategy to grow our global water treatment platform,” said Ajita Rajendra, chairman and chief executive officer of A.O. Smith. “The Hague brand has a very good, longstanding reputation for innovative and quality products.”
“We’re happy that our family-owned business is finding a home in a company with a longstanding history of integrity, innovation and customer satisfaction,” said Bob Hague, president and chief executive officer of Hague. “We look forward to the growth opportunities A. O. Smith will provide to both our employees and our customers.”
