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Will Watsco's Granite Group Deal Strengthen Its Plumbing Market Reach?
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Key Takeaways
Watsco is acquiring The Granite Group, a $500 million-sales distributor with 82 Northeast locations.
The Granite Group adds plumbing exposure, 11,000 customers and about 29,000 SKUs across seven states.
Watsco will retain Granite's management while providing scale, capital, OEM relationships and technology.
Watsco, Inc. (WSO - Free Report) has entered into an agreement to acquire The Granite Group, a distributor of plumbing and HVAC products. The Granite Group generates approximately $500 million in sales across seven Northeast states. The transaction is expected to close after customary closing conditions and regulatory approvals.
Founded in 1971, The Granite Group is headquartered in Concord, NH. The third-generation, family-led business has built its operations through bolt-on acquisitions and new store openings. Sales have grown at a 10% annual compounded rate since 2010, giving Watsco an established business with a track record of expansion.
Watsco Gains Scale Across the Northeast
The Granite Group serves approximately 11,000 customers through 82 locations. The business offers about 29,000 SKUs sourced from more than 450 vendors. Its footprint covers New Hampshire, Vermont, Maine, Massachusetts, Connecticut, Rhode Island and New York.
The scale of the business gives Watsco a broader distribution network in the Northeast. The Granite Group's product mix also adds further exposure to plumbing alongside HVAC products. The 10% compounded sales growth since 2010 provides a history of expansion, supported by more than 30 new store openings and bolt-on acquisitions.
Watsco Deepens Its Plumbing Market Position
The acquisition adds density and product diversification to Watsco's distribution operations. This also expands the company's presence in plumbing, which it describes as a large and fragmented market. The Granite Group's existing customer base, locations and product offering provide an established platform in this market.
The Granite Group will operate as an independent business under its existing management team, led by Bill Condron. This approach is consistent with Watsco's strategy of retaining leadership teams while providing access to scale, capital, OEM relationships and technology. The structure allows The Granite Group to maintain its existing operations while gaining resources from Watsco.
Watsco Builds on Its Acquisition Strategy
The Granite Group deal adds to Watsco's long-term buy-and-build approach. Since 1989, the company has acquired 73 businesses across the HVAC and plumbing markets. Most were successful, multi-generation, family-owned businesses. Watsco's approach centers on supporting existing leadership and preserving the cultures of acquired businesses while providing resources to support growth.
The strategy has also continued in 2026. On June 1, Watsco completed the acquisition of Jackson Supply Company, an HVAC distributor with approximately $230 million in annualized sales across 25 Sunbelt locations. Watsco is also seeking additional acquisition opportunities as it looks to expand the relatively low market share of the estimated $74 billion North American distribution market.
The Granite Group transaction therefore adds another sizeable plumbing and HVAC distributor to Watsco's acquisition portfolio. Its contribution to growth will depend on the company's ability to build on The Granite Group's existing footprint and growth track record while integrating the business within the broader distribution strategy.
WSO Stock’s Price Performance & Valuation Trend
Shares of this HVAC/R distributor in North America have declined 7.5% in the year-to-date period, underperforming the Zacks Manufacturing - General Industrial industry.
WSO’s Share Price Performance (YTD)
Image Source: Zacks Investment Research
WSO stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 23.98, as the trend lines suggest below.
WSO Valuation (P/E F12M)
Image Source: Zacks Investment Research
Earnings Estimate Trend of WSO
WSO’s earnings estimates for 2026 and 2027 have declined in the past 30 days, as shown below. The revised estimates indicate a 0.3% decline in 2026, followed by 9.1% growth in 2027.
It has a trailing four-quarter negative earnings surprise of 30.8%, on average. Shares of Columbus McKinnon have declined 4.6% year to date. The Zacks Consensus Estimate for Columbus McKinnon’s fiscal 2027 sales and earnings per share (EPS) indicates growth of 76.2% and 3.2%, respectively, from the prior-year levels.
Helios Technologies, Inc. (HLIO - Free Report) currently carries a Zacks Rank #2 (Buy). Helios delivered a trailing four-quarter earnings surprise of 13.1%, on average. The stock has climbed 25.8% year to date.
The Zacks Consensus Estimate for Helios’ 2026 sales and EPS indicates improvements of 7% and 24.6%, respectively, from a year ago.
The Gorman-Rupp Company (GRC - Free Report) currently holds a Zacks Rank of 2. Gorman-Rupp delivered a trailing four-quarter earnings surprise of 17.1%, on average. Gorman-Rupp stock has gained 49.8% year to date.
The Zacks Consensus Estimate for Gorman-Rupp’s 2026 sales and EPS implies an increase of 6.5% and 24.8%, respectively, from a year ago.
View the Zacks #1 Rank List
Image: Bigstock
Will Watsco's Granite Group Deal Strengthen Its Plumbing Market Reach?
Key Takeaways
Watsco, Inc. (WSO - Free Report) has entered into an agreement to acquire The Granite Group, a distributor of plumbing and HVAC products. The Granite Group generates approximately $500 million in sales across seven Northeast states. The transaction is expected to close after customary closing conditions and regulatory approvals.
Founded in 1971, The Granite Group is headquartered in Concord, NH. The third-generation, family-led business has built its operations through bolt-on acquisitions and new store openings. Sales have grown at a 10% annual compounded rate since 2010, giving Watsco an established business with a track record of expansion.
Watsco Gains Scale Across the Northeast
The Granite Group serves approximately 11,000 customers through 82 locations. The business offers about 29,000 SKUs sourced from more than 450 vendors. Its footprint covers New Hampshire, Vermont, Maine, Massachusetts, Connecticut, Rhode Island and New York.
The scale of the business gives Watsco a broader distribution network in the Northeast. The Granite Group's product mix also adds further exposure to plumbing alongside HVAC products. The 10% compounded sales growth since 2010 provides a history of expansion, supported by more than 30 new store openings and bolt-on acquisitions.
Watsco Deepens Its Plumbing Market Position
The acquisition adds density and product diversification to Watsco's distribution operations. This also expands the company's presence in plumbing, which it describes as a large and fragmented market. The Granite Group's existing customer base, locations and product offering provide an established platform in this market.
The Granite Group will operate as an independent business under its existing management team, led by Bill Condron. This approach is consistent with Watsco's strategy of retaining leadership teams while providing access to scale, capital, OEM relationships and technology. The structure allows The Granite Group to maintain its existing operations while gaining resources from Watsco.
Watsco Builds on Its Acquisition Strategy
The Granite Group deal adds to Watsco's long-term buy-and-build approach. Since 1989, the company has acquired 73 businesses across the HVAC and plumbing markets. Most were successful, multi-generation, family-owned businesses. Watsco's approach centers on supporting existing leadership and preserving the cultures of acquired businesses while providing resources to support growth.
The strategy has also continued in 2026. On June 1, Watsco completed the acquisition of Jackson Supply Company, an HVAC distributor with approximately $230 million in annualized sales across 25 Sunbelt locations. Watsco is also seeking additional acquisition opportunities as it looks to expand the relatively low market share of the estimated $74 billion North American distribution market.
The Granite Group transaction therefore adds another sizeable plumbing and HVAC distributor to Watsco's acquisition portfolio. Its contribution to growth will depend on the company's ability to build on The Granite Group's existing footprint and growth track record while integrating the business within the broader distribution strategy.
WSO Stock’s Price Performance & Valuation Trend
Shares of this HVAC/R distributor in North America have declined 7.5% in the year-to-date period, underperforming the Zacks Manufacturing - General Industrial industry.
WSO’s Share Price Performance (YTD)
Image Source: Zacks Investment Research
WSO stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 23.98, as the trend lines suggest below.
WSO Valuation (P/E F12M)
Image Source: Zacks Investment Research
Earnings Estimate Trend of WSO
WSO’s earnings estimates for 2026 and 2027 have declined in the past 30 days, as shown below. The revised estimates indicate a 0.3% decline in 2026, followed by 9.1% growth in 2027.
Image Source: Zacks Investment Research
WSO Stock’s Zacks Rank & Key Picks
Watsco currently carries a Zacks Rank #4 (Sell).
Here are some better-ranked stocks from the Industrial Products sector.
Columbus McKinnon Corporation (CMCO - Free Report) presently flaunts a Zacks Rank of #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
It has a trailing four-quarter negative earnings surprise of 30.8%, on average. Shares of Columbus McKinnon have declined 4.6% year to date. The Zacks Consensus Estimate for Columbus McKinnon’s fiscal 2027 sales and earnings per share (EPS) indicates growth of 76.2% and 3.2%, respectively, from the prior-year levels.
Helios Technologies, Inc. (HLIO - Free Report) currently carries a Zacks Rank #2 (Buy). Helios delivered a trailing four-quarter earnings surprise of 13.1%, on average. The stock has climbed 25.8% year to date.
The Zacks Consensus Estimate for Helios’ 2026 sales and EPS indicates improvements of 7% and 24.6%, respectively, from a year ago.
The Gorman-Rupp Company (GRC - Free Report) currently holds a Zacks Rank of 2. Gorman-Rupp delivered a trailing four-quarter earnings surprise of 17.1%, on average. Gorman-Rupp stock has gained 49.8% year to date.
The Zacks Consensus Estimate for Gorman-Rupp’s 2026 sales and EPS implies an increase of 6.5% and 24.8%, respectively, from a year ago.