Pentair targets “robust” 2027 growth with a $1.4 billion acquisition of the Taco Group, aiming to offset sluggish performance in its core pool products business. The London-based water treatment company announced the deal on Tuesday, revealing plans to buy the hydronic and water-based solutions business as it works to right-size its inventory and expand into new markets.
The transaction, subject to regulatory approval and expected to close in the fourth quarter of 2026, will help Pentair increase its exposure to high-growth end-markets, primarily in North America. The company stated the purchase price represents a multiple of about 10.5x its expected 2026 adjusted EBITDA, including roughly $165 million in tax benefits. Taco is projected to generate about $540 million in revenue for fiscal year 2026.
Interim CFO Bob Fishman described the acquisition as establishing a “new growth engine” for the firm. He noted that while the primary focus is top-line growth, the company anticipates generating approximately $30 million in run-rate cost synergies over the next few years through purchasing power and economies of scale. These synergies are expected to come from the combined entity’s ability to leverage its size.
The deal arrives during a period of significant financial strain for Pentair. For the quarter ended June 30, core sales fell by 17% to $933 million, a decline largely driven by a $170 million impact from destocking pool channel inventory. The pool segment itself saw sales drop by 42% year-over-year, a sharp contraction that has forced the company to undertake a complete review of its operations.
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The interim finance chief, who took over in mid-July after the abrupt departure of Nicholas Brazis, said the company needs to deepen dealer engagement and accelerate customer-driven innovation. Despite the recent challenges, Pentair believes the pool segment’s struggles are temporary and remains confident in its market leadership position.
Inventory cuts and tariff impacts weigh on results
Looking ahead, pool sales are expected to remain under pressure, dropping by between 23% and 25% in the third quarter as the company continues to destock for the 2027 season. This reduction in sales volume contributed to a 20% slump in adjusted operating income for the second quarter, which hit $237 million. The company also reported a negative $35 million impact from tariff refunds during the period.
For the full year, Pentair expects total sales to decline by about 4% to 7% year-over-year, with a midpoint of roughly $4 billion. This guidance aligns with previous forecasts released in July. The company continues to handle economic headwinds, including the lingering effects of tariffs, as it attempts to stabilize its performance and execute on its long-term strategy.
