CSW Industrials announced the strategic deployment of $30.3 million, excluding future earn-outs, upon completing the acquisitions of Dust Free, LP, Guardian Drain Lock, and Sure Grade Drain.
These acquisitions are evidence of CSW’s continued commitment to adding innovative product offerings for existing residential and commercial customers by maximizing its extensive experience in the HVAC/R and plumbing end markets and utilizing its robust distribution channels and go-to-market strategy. CSWI funded the deals with cash on hand and borrowings under its existing $500 million revolving credit facility.
The $27.4 million of capital for acquiring Dust Free – excluding future earn-outs, represents a valuation of about 7.5x Dust Free’s trailing twelve-month adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). And the acquisition of Dust Free brings a family of IAQ products to CSWI designed to improve the air quality we breathe.
Dust Free’s IAQ strategy integrates three levels of products to increase the air quality of a space: Filtration, Purification, and UV Inactivation. And through these differentiated products, Contractor Solutions expects to achieve incremental market penetration and positively impact the health of our customers.
Along with Dust Free, CSWI closed two small product line acquisitions, totaling $2.9 million, in the second fiscal quarter of 2024 for Guardian Drain Lock and Sure Grade Drain. These two acquisitions further expand the Company’s position in the plumbing end market. And the Guardian Drain Lock portfolio offers tamper-proof locking floor sinks and floor drains designed for commercial use to protect unwanted debris from clogging and backing up plumbing lines and help to maintain a safe and hygienic environment. Sure Grade Drain was an IP acquisition for an innovative on-grade adjustable drain primarily used in commercial settings.
KEY QUOTES:
“These acquisitions are completely consistent with our record of enhancing long-term shareholder value as we continue to drive impressive inorganic and organic above-market growth in our current end markets.”
“Having served as a Master Distributor of Dust Free indoor air quality (IAQ) products since 2021, we know how well these newly acquired products complement CSWI’s existing HVAC/R offerings and integrate directly into Contractor Solutions’ sales channel, warehouses, distribution networks, and supply chain. The addition of Dust Free’s high value-added products further solidifies our leadership position in the HVAC/R marketplace.”
- Joseph B. Armes, Chairman, President, and Chief Executive Officer of CSW Industrials
“We are excited to continue investing in our breadth and depth of products within Contractor Solutions. Adding Dust Free to our portfolio allows us to offer industry leading technology to address indoor air quality. I could not be more excited to work with the Dust Free team to increase the distribution and evolution of these products. The addition of Guardian Drain Lock and Sure Grade Drain extend our innovative plumbing offerings to our distribution channels.”
- Jeff Underwood, Senior Vice President of Sales and Marketing for Contractor Solutions