Pentair Borrowed $1.4 Billion To Close Taco Deal, And A Shareholder Suit Is Now Live
The water-equipment maker's quarterly report shows a fully drawn term loan, unfinished deal accounting and a securities class action.
Pentair, which makes pumps, filtration and pool equipment, borrowed the full $1.4 billion under new term loans on October 1 to close its $1.425 billion purchase of Taco Group Holdings, according to its quarterly report filed Tuesday. Shareholders also sued the company and some executives in August.
Debt that arrived on closing day
The $1.4 billion lands on top of $1,484.1 million of total debt Pentair carried at September 30. The company says the proceeds paid for part of the Taco price plus fees and expenses; the rest came from cash on hand.
The term loans come in two pieces. A $400.0 million Tranche 1 matures April 1, 2028, and a $1.0 billion Tranche 2 matures May 5, 2030, with quarterly principal payments of $6.3 million starting in the first quarter of 2028 and rising to $12.5 million in the first quarter of 2029. The loans replaced a $1.4 billion bridge commitment on September 1.
Contractual debt maturities at September 30, before the Taco borrowing, totaled $1,500.7 million.
The refinancing language changed
In its prior quarterly report, Pentair said it intended to refinance bridge financing through a permanent debt issuance it expected to be investment grade. The new report says only that it funded the deal through "cash on hand and debt financing."
The lender covenants cap leverage at 3.75 to 1.00, or 4.25 to 1.00 for four testing periods after certain material acquisitions, at Pentair's election.
A securities suit and unfinished accounting
The suit sits in federal court in Minnesota. Plaintiffs claim misleading statements and want unspecified damages for the stock's decline. Pentair says it plans to vigorously defend itself.
Taco joins the Water Solutions segment. Pentair says the initial accounting for the deal is incomplete, so some required disclosures are not yet available. Estimated 2027 amortization of $60.3 million excludes Taco's intangibles.
A weak Pool business behind the deal
Pool sales fell 20.6% in the first nine months, driven by distributors working down inventory. The company says that destocking is complete and it believes Pool is positioned for growth in 2027.
In the same period Pentair repurchased $350.0 million of stock and paid $130.8 million in dividends, leaving $650.0 million under a $1.0 billion buyback authorization that expires December 31, 2028.
Pentair's market value was $8.8 billion as of Tuesday's report, and its next filing should carry the Taco purchase price allocation.
Sources
- 10-Q Filing — Pentair plc (PNR) — SEC EDGAR
- 10-Q Filing — Pentair plc (PNR), Q2 FY2026 filed 2026-07-28 (comparison basis) — SEC EDGAR
- Earnings release (8-K Item 2.02, q32026pressrelease.htm) — Pentair plc, filed 2026-10-27 — SEC EDGAR
- Pentair Reports Q3 Earnings Above Estimates, Maintains 2026 EPS Outlook at $4.70 — Yahoo Finance
- Pentair Reports Third Quarter 2026 Results – Company Announcement - FT.com — Financial Times
- PNR Q3 Earnings Beat Estimates, Revenues Dip Y/Y on Pool Weakness — Yahoo Finance
- Here's What Key Metrics Tell Us About Pentair (PNR) Q3 Earnings — Yahoo Finance
- Pentair Q3 2026 Earnings Call Transcript — benzinga.com
