Reece Group acquires US-based MORSCO in AUD$1.9bn deal

By Thierry Boudan

Reece Group, Australia’s largest plumbing and bathroom supplies company, has announced that it has agreed to acquire US-based commercial and residential plumbing distributor MORSCO in a deal valued at AUD$1.9bn.

By acquiring the Texas-based firm, Reece Group will gain access to the USD$32bn-valued US plumbing market, significantly accelerating the firm’s global expansion.

See also:

“We're excited to be entering a long-term partnership with MORSCO to invest in the growth of their business in the US market,” says CEO Peter Wilson.

“It's a market that's forecast to grow at twice the rate of the Australian market and it is currently about eight times the size.”

MORSCO operates within 16 states, operating more than 171 branches and 2,500 employees across its network.

According to Reuters, the deal is only the 10th time in the past decade that an Australian company has acquired a large US rival within the same industry.

Reece Group will fund the acquisition with a $560mn equity finance raising, valued at AUD$9.30 per share – a 13.5% discount compared to Reece Group’s unaffected share price, $300mn from the Wilson family, and $1.14bn in a seven-year secured credit loan.

Reece Group intends to operate MORSCO as a separate business from its existing Australian and New Zealand unit.

Share

Featured Articles

Twitter timeline – how Musk pulled off a hostile takeover

Elon Musk strikes deal to buy Twitter for US$44bn following four months of cryptic tweets, secret meetings and buying of shares – here’s the timeline

Top 10 Asia restaurants, from Tokyo’s Den to Bangkok’s Sorn

From Tokyo to Bangkok, with cuisines spanning Cantonese, Thai and German, we highlight Asia’s top 10 places to eat, as per Asia’s 50 Best Restaurants

Microsoft: what Asia leaders need to know about hybrid work

Microsoft’s 2022 Work Trend Index guides Asia leaders to navigating a hybrid future – from making the office worth the commute to rebuilding social capital

Meet the company: EV Nio to list in Hong Kong, enter Europe

Leadership & Strategy

12 Tech trends to watch closely in 2022, from CB Insights

Technology

Why Deloitte Australia’s HR technology is winning awards

Human Capital