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Water treatment company Xylem acquiring Sensus for $1.7B

August 15, 2016

WASHINGTON (AP) — The water treatment company Xylem is acquiring smart meter maker Sensus for $1.7 billion in cash as it pushes into emerging markets.

Sensus is owned by investment funds affiliated with The Jordan Company and GS Capital Partners 2000. The deal is expected to close in the final quarter of 2016.

Shares of Xylem Inc. rose more than 3 percent in morning trading, to almost $50 a share. The company’s stock is up more than 36 percent since the beginning of 2016 and almost 50 percent during the past year.

Sensus, based in Raleigh, N.C., has about 3,300 employees worldwide, with 70 percent of its 2016 revenues coming from its U.S. operations. Xylem has more than 12,500 employees worldwide and does business in more than 150 countries. It reported adjusted revenue of $837 million in fiscal 2016, with $159 million in adjusted earnings.

Xylem will finance the transaction with about $400 million in cash, new and existing credit and short- and long-term debt. The company says the deal would not change Xylem’s full-year earnings outlook for 2016 but that it expects to save $50 million in cost synergies within three years of the transaction closing.

Earlier this month, Xylem, based in The Rye Brook, N.Y., reported second-quarter earnings of $71 million, with profit of 39 cents per share. Earnings, adjusted for restructuring costs, were 48 cents per share, beating Wall Street estimates of 47 cents per share. The company reported revenue of $3.7 billion for 2015.

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