Pentair Funds Taco Deal With $1.4 Billion Of Term Loans, Sees 2027 Earnings Lift
Management says Taco is running ahead of plan, and Bob Howe starts as CFO on November 1 with leverage near 2.5 times.
Pentair, the water-products maker, said on its third-quarter earnings call that Taco, the water-circulation business it completed buying on October 1, is running ahead of plan and should add to adjusted earnings per share in 2027. The deal was financed with $1.4 billion of term loans at about 5.25% interest, incoming Chief Financial Officer Bob Howe said.
Taco's numbers and the debt
CEO John Stauch said Taco's estimated 2026 sales are about $560 million, up roughly 23% from 2025. For 2027 he expects sales above $620 million, growth of more than 10%.
Stauch put Taco's EBITDA at about $90 million in 2026 and above $105 million in 2027, which he said would be mid-teens growth.
Howe said pro forma net leverage was about 2.5 times at the start of the fourth quarter, against 1.4 times at the end of the third. Pentair will de-lever over the next 24 months to its normal range of one and a half to two times, he said. Capital choices, he added, are "an and choice not an or" across investment, acquisitions, dividends and buybacks.
On synergies, Stauch said cross-selling opportunities through Taco's rep channel have been identified but not quantified. The first priority is to "do no harm" to Taco's business model.
Quarter and CFO handoff
Pentair, which sells pumps, water treatment products and pool equipment, reported third-quarter sales of $976 million and adjusted EPS of $1.18, above its guidance of about $1.05 to $1.08. Pool sales fell 18% to $291 million as the company finished working down channel inventory. Free cash flow was $153 million for the quarter and $620 million for the first nine months.
Howe takes over from outgoing interim CFO Bob Fishman on November 1. The company reaffirmed the midpoint of full-year adjusted EPS guidance at about $4.70 and introduced fourth-quarter adjusted EPS guidance of about $1.15. Fourth-quarter sales are guided up about 7% to 9%, including Taco.
Tariff refunds of $43 million received so far this year will not repeat, and no more are expected in the fourth quarter, Howe said. Stauch called it a year-over-year hurdle for 2027.
Pool reset and a 2027 baseline
Stauch estimated 2026 pool sell-through at about $1.45 billion and said he expects it flat in 2027. Because shipments would then match sell-through, he said, that implies about $180 million of sales growth, or about 14%, with roughly 30% return on sales. Dealer price increases of 3% to 4% are planned.
Stauch also named Josh Cowley to lead Pentair Pool.
Stauch said a fuller 2027 outlook will come on the fourth-quarter earnings call early next year.
Sources
- Pentair plc (PNR) Q3 Earnings and Revenues Beat Estimates — Yahoo Finance
- Pentair Reports Third Quarter 2026 Results — businesswire.com
