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A. O. Smith Acquires Leonard Valve, Strengthens Product Offerings
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Key Takeaways
AOS acquired Leonard Valve for $470M to strengthen water temperature control and mixing solutions.
The deal expands A. O. Smith's digital capabilities across water heating and boiler control markets.
Leonard Valve's products serve universities, hospitals, and industrial and commercial facilities.
A. O. Smith Corporation (AOS - Free Report) recently acquired LVC Holdco LLC (Leonard Valve) for $470 million. It’s worth noting that the transaction was worth about $412 million with an adjustment for tax benefits and was carried out in cash.
A. O. Smith’s shares lost 2.2% yesterday to eventually close the trading session at $67.12.
Based in Cranston, RI, Leonard Valve is a leading provider of digital & thermostatic mixing systems, water temperature control valves, and monitoring devices. The company’s products are widely utilized across universities, hospitals, industrial facilities and other commercial sectors.
Acquisition Rationale
The latest buyout is in sync with the company’s policy of acquiring businesses to expand its market share and customer base. The buyout is likely to strengthen A. O. Smith’s water heating, digital and thermostatic mixing solutions and boiler control offerings. It will also help AOS to expand its digital competence and presence in the water management market.
Acquisitions are an essential aspect of A. O. Smith's growth strategy. In November 2024, the company acquired the Pureit business from Unilever. The inclusion of Pureit’s expertise in water treatment solutions, coupled with its strong brand recognition, enabled AOS to boost its position in the water treatment industry in India. Also, in March 2024, it acquired privately held water treatment company Impact Water Products, which expanded its water treatment footprint in North America.
Zacks Rank, Price Performance and Estimate Revisions
A. O. Smith, with approximately $9.5 billion market capitalization, currently carries a Zacks Rank #3 (Hold). The company’s focus on cost management and operational excellence is supporting its margin performance. Also, its strong cash position and policy of returning wealth to its shareholders are encouraging. However, it is grappling with lower volumes of residential water treatment products in China.
Image Source: Zacks Investment Research
In the past three months, the company’s shares have lost 3.8% compared with the industry’s decline of 2.7%.
The Zacks Consensus Estimate for its earnings is pegged at $3.79 for 2025, suggesting a decrease of 0.3% from the 60-day-ago figure.
Key Picks
Some better-ranked stocks from the same space are presented below.
In the past 60 days, the Zacks Consensus Estimate for Powell Industries’ fiscal 2026 (ending September 2026) earnings has increased 2.2%.
Nordson Corporation (NDSN - Free Report) presently has a Zacks Rank of 2. Nordson delivered a trailing four-quarter average earnings surprise of 2.2%. In the past 60 days, the Zacks Consensus Estimate for Nordson’s fiscal 2026 (ending October 2026) earnings has increased 2.3%.
Trimble Inc. (TRMB - Free Report) currently carries a Zacks Rank of 2. TRMB delivered a trailing four-quarter average earnings surprise of 7.4%. In the past 60 days, the Zacks Consensus Estimate for Trimble’s 2025 earnings has been stable.
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A. O. Smith Acquires Leonard Valve, Strengthens Product Offerings
Key Takeaways
A. O. Smith Corporation (AOS - Free Report) recently acquired LVC Holdco LLC (Leonard Valve) for $470 million. It’s worth noting that the transaction was worth about $412 million with an adjustment for tax benefits and was carried out in cash.
A. O. Smith’s shares lost 2.2% yesterday to eventually close the trading session at $67.12.
Based in Cranston, RI, Leonard Valve is a leading provider of digital & thermostatic mixing systems, water temperature control valves, and monitoring devices. The company’s products are widely utilized across universities, hospitals, industrial facilities and other commercial sectors.
Acquisition Rationale
The latest buyout is in sync with the company’s policy of acquiring businesses to expand its market share and customer base. The buyout is likely to strengthen A. O. Smith’s water heating, digital and thermostatic mixing solutions and boiler control offerings. It will also help AOS to expand its digital competence and presence in the water management market.
Acquisitions are an essential aspect of A. O. Smith's growth strategy. In November 2024, the company acquired the Pureit business from Unilever. The inclusion of Pureit’s expertise in water treatment solutions, coupled with its strong brand recognition, enabled AOS to boost its position in the water treatment industry in India. Also, in March 2024, it acquired privately held water treatment company Impact Water Products, which expanded its water treatment footprint in North America.
Zacks Rank, Price Performance and Estimate Revisions
A. O. Smith, with approximately $9.5 billion market capitalization, currently carries a Zacks Rank #3 (Hold). The company’s focus on cost management and operational excellence is supporting its margin performance. Also, its strong cash position and policy of returning wealth to its shareholders are encouraging. However, it is grappling with lower volumes of residential water treatment products in China.
Image Source: Zacks Investment Research
In the past three months, the company’s shares have lost 3.8% compared with the industry’s decline of 2.7%.
The Zacks Consensus Estimate for its earnings is pegged at $3.79 for 2025, suggesting a decrease of 0.3% from the 60-day-ago figure.
Key Picks
Some better-ranked stocks from the same space are presented below.
Powell Industries (POWL - Free Report) currently carries a Zacks Rank of 2 (Buy). POWL delivered a trailing four-quarter average earnings surprise of 8.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, the Zacks Consensus Estimate for Powell Industries’ fiscal 2026 (ending September 2026) earnings has increased 2.2%.
Nordson Corporation (NDSN - Free Report) presently has a Zacks Rank of 2. Nordson delivered a trailing four-quarter average earnings surprise of 2.2%. In the past 60 days, the Zacks Consensus Estimate for Nordson’s fiscal 2026 (ending October 2026) earnings has increased 2.3%.
Trimble Inc. (TRMB - Free Report) currently carries a Zacks Rank of 2. TRMB delivered a trailing four-quarter average earnings surprise of 7.4%. In the past 60 days, the Zacks Consensus Estimate for Trimble’s 2025 earnings has been stable.