Watts Water Technologies Inc. has announced the signing of a definitive agreement to acquire Danfoss Socla S.A.S, and the related water controls business of certain other entities controlled by Danfoss A/S, in a share and asset purchase transaction. The purchase agreement also provides Watts with an option to purchase the water controls business of Danfoss in China, which may be exercised prior to the closing date. The acquisition of Socla is expected to close by the end of April 2011. The consummation of the acquisition is subject to customary closing conditions.  

Socla is a leading manufacturer of a wide range of water protection valves and flow control solutions for the plumbing market and for the heating, ventilation and air-conditioning market. The company is based in France, and its products are distributed worldwide for municipal, industrial, commercial and residential use.

Socla’s annual revenue for 2010, including the water controls business in China, was approximately $135 million. Under the terms of the purchase agreement, Watts will pay approximately $165 million in cash to purchase 100 percent of the share capital of Socla on a debt/cash free basis, plus the related water controls business assets. The purchase price is subject to a net debt and net working capital adjustment. The purchase price will be increased by approximately $4 million if Watts elects to purchase the water controls business in China. The foregoing revenue and purchase price amounts are based on the current exchange rate of the euro to the U.S. dollar. Watts intends to fund the transaction with cash on hand and borrowings under its credit facility.

David Coghlan, chief executive officer, comments, “Socla significantly strengthens our European plumbing and flow control platform, and also adds to our HVAC platform. Socla’s major product lines include backflow preventers, check valves and pressure reducing valves, which are very similar to our core product lines in North America. This transaction positions Watts as a strong competitor in Europe in three key areas: 1. residential and commercial flow control; 2. HVAC and gas; and 3. drains.”

Watts Water Technologies, Inc. is a world leader in the manufacture of innovative products to control the efficiency, safety and quality of water within residential, commercial, and institutional applications.