A. O. Smith Completes Acquisition of Leonard Valve Company

Rhea-AI Summary

A. O. Smith (NYSE: AOS) completed the acquisition of Leonard Valve Company on January 6, 2026 for a $470 million all-cash purchase price, with an estimated post-tax adjustment valuing the deal at approximately $412 million. The transaction was funded with cash borrowed under a new credit agreement. Leonard Valve, founded in 1911 and based in Cranston, Rhode Island, designs water temperature control valves, thermostatic mixing systems, digital monitoring devices and Heat-Timer boiler controls for hospitals, schools, industrial and other commercial customers.

The company said the deal expands A. O. Smith's water management presence, strengthens digital expertise and broadens integrated product offerings for commercial and institutional customers. BofA Securities served as financial advisor and Foley & Lardner served as legal advisor.

Positive

• Acquisition price $470 million all-cash
• Net purchase value ~$412 million after estimated tax benefits
• Adds Leonard Valve boiler controls and digital monitoring product lines
• Expands commercial/institutional water management and digital expertise

Negative

• Transaction funded by new credit agreement increasing company debt
• Company cites risk of failing to realize expected synergies from acquisition

Key Figures

Purchase price $470 million Gross consideration for Leonard Valve, subject to customary adjustments

Adjusted transaction value $412 million All-cash transaction value after estimated tax benefits

Founding year 1911 Year Leonard Valve was founded

Market Reality Check

$70.52 Last Close

Volume Volume 1,058,042 shares vs 20-day average 1,165,509 shares ahead of this acquisition close. normal

Technical Price 68.65 is trading slightly above the 200-day MA at 68.08, indicating a stable longer-term trend pre-announcement.

Peers on Argus

Peers showed mixed moves: CR (+1.42%), IEX (+0.57%), NDSN (+2.86%), GGG (+1.97%), while GNRC fell (-2.04%), suggesting the AOS acquisition news was more stock-specific than broad sector-driven.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Nov 12	Acquisition announcement	Positive	+0.9%	Announced plan to acquire Leonard Valve to expand water management capabilities.
Oct 28	Earnings release	Positive	-2.6%	Reported Q3 sales and EPS growth with updated full-year guidance.
Oct 13	Dividend increase	Positive	+1.7%	Raised quarterly dividend by 6% continuing multi-decade dividend growth.
Oct 03	Leadership change	Neutral	-0.3%	Appointed new chief digital information officer to lead digital initiatives.
Oct 02	Conference call notice	Neutral	+0.6%	Announced schedule for Q3 2025 earnings release and investor call.

Pattern Detected

Recent corporate actions—including acquisitions and dividend increases—have generally seen modest positive or mixed immediate price reactions, with one notable divergence on strong earnings.

Recent Company History

Over the last few months, A. O. Smith reported solid Q3 2025 results, modestly trimming the share price despite higher sales and EPS. A dividend increase to $0.36 per share and consistent dividend growth underpinned shareholder return focus. The November 2025 announcement to acquire Leonard Valve for $470M was received positively, with a 0.88% move. Today’s completion of that deal continues this acquisition narrative, transitioning from agreement to integration execution.

Market Pulse Summary

This announcement confirms A. O. Smith’s completion of the Leonard Valve acquisition for $470 million (about $412 million after tax benefits), advancing its strategy in water management and digital controls. It follows the November 2025 agreement and builds on recent earnings and dividend growth. Key factors to watch include integration progress, returns on the all-cash investment funded via a new credit agreement, and any updates in future 10-K or 10-Q filings regarding synergy realization.

Key Terms

credit agreement financial

"was funded with cash borrowed under a new credit agreement."

A credit agreement is a written loan contract between a borrower and a bank or other lender that lays out how much money can be borrowed, the interest rate, repayment schedule, fees, and the rules the borrower must follow. For investors, it matters because those terms affect a company’s cash costs, borrowing flexibility and risk of default — similar to how a mortgage’s rules determine a homeowner’s monthly budget and freedom to make changes.

forward-looking statements regulatory

"This release contains statements that the Company believes are "forward-looking statements""

Forward-looking statements are predictions or plans that companies share about what they expect to happen in the future, like estimating sales or profits. They matter because they help investors understand a company's outlook, but since they are based on guesses and assumptions, they can sometimes be wrong.

thermostatic mixing systems technical

"designs and manufactures water temperature control valves, digital and thermostatic mixing systems,"

Thermostatic mixing systems are plumbing devices that blend hot and cold water to deliver water at a steady, pre-set temperature, automatically adjusting for changes in supply or demand much like a car’s cruise control keeps speed constant. They matter to investors because they affect safety compliance, liability risk, maintenance costs, and product demand in buildings and healthcare settings; companies that make, install or service these systems can see steady revenue tied to regulations and aging infrastructure.

hydronic heating technical

"control of water temperature and hydronic heating in demanding environments."

Hydronic heating is a building heating system that warms spaces by circulating hot water through pipes to radiators, baseboards, or under‑floor tubing, much like a bloodstream delivering warmth around a house. For investors, it matters because hydronic systems influence a property’s energy efficiency, operating costs, maintenance needs and retrofit potential, which affect long‑term cash flow, valuation and demand for manufacturers, installers and energy‑efficiency products.

Form 10-K regulatory

"discussed in the Company's filings with Securities and Exchange Commission, including the Company's Annual Report on Form 10-K"

A Form 10-K is a comprehensive report that publicly traded companies are required to file annually with regulators. It provides a detailed overview of a company's financial health, operations, and risks, similar to a detailed health report. Investors use this information to assess the company's performance and make informed decisions about buying or selling its stock.

Form 10-Q regulatory

"including the Company's Annual Report on Form 10-K for the year ended December 31, 2024, quarterly reports on Form 10-Q"

A Form 10-Q is a detailed report that publicly traded companies are required to file with regulators three times a year, providing an update on their financial health and business activities. It is important for investors because it offers timely insights into a company's performance, helping them make informed decisions about buying or selling stocks. Think of it as a regular check-up report that shows how well a company is doing.

Form 8-K regulatory

"and current reports on Form 8-K."

A Form 8-K is a report that companies file with the government to share important news quickly, such as changes in leadership, major business deals, or financial updates. It matters because it helps investors stay informed about significant events that could affect the company's value or stock price.

AI-generated analysis. Not financial advice.

MILWAUKEE, Jan. 6, 2026 /PRNewswire/ -- Global water technology company A. O. Smith Corporation (the "Company" or "A. O. Smith") (NYSE: AOS) announced today that it has completed the acquisition of LVC Holdco LLC ("Leonard Valve") for $470 million, subject to customary adjustments. The all-cash transaction is valued at approximately $412 million after adjusting for estimated tax benefits and was funded with cash borrowed under a new credit agreement.

This acquisition expands A. O. Smith's presence in the water management market.

"This acquisition expands our presence in the water management market, enhances our digital expertise and broadens our integrated product offering with commercial and institutional customers," said Steve Shafer, chief executive officer of A. O. Smith. "We are proud to welcome the Leonard Valve team into the A. O. Smith family. Both companies share a commitment to innovation, integrity and exceptional customer service."

Founded in 1911 and headquartered in Cranston, Rhode Island, Leonard Valve designs and manufactures water temperature control valves, digital and thermostatic mixing systems, and related monitoring devices used in hospitals, schools, universities, industrial facilities and other institutional and commercial settings. Together with its Heat-Timer brand of advanced boiler controls, Leonard Valve helps customers ensure safe, precise and efficient control of water temperature and hydronic heating in demanding environments.

"We are excited to join A. O. Smith," said David Brakenwagen, president of Leonard Valve. "Together, we can continue to further invest in our people and technology, enhance our digital and thermostatic mixing solutions, expand our boiler control offerings, and deliver even more integrated solutions to our customers."

BofA Securities served as exclusive financial advisor, and Foley & Lardner LLP served as legal advisor, to A. O. Smith Corporation.

Forward-looking Statements

This release contains statements that the Company believes are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by the use of words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "forecast," "continue," "guidance," "outlook" or words of similar meaning. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: failure to realize the expected benefits of the transaction or expected synergies; difficulties in predicting results of operations of an acquired business; negative impact to the Company's businesses from international tariffs, including any new or increased tariffs that could also trigger retaliatory responses from other countries, as well as trade disputes and geopolitical differences, including the conflicts in Ukraine and the Middle East; the Company's inability to successfully integrate or achieve its strategic objectives resulting from acquisitions; failure to realize the expected benefits of acquisitions or expected synergies; and adverse developments in general economic, political and business conditions in key regions of the world. Additional factors are discussed in the Company's filings with Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2024, quarterly reports on Form 10-Q and current reports on Form 8-K. Forward-looking statements included in this news release are made only as of the date of this release, and the Company is under no obligation to update these statements to reflect subsequent events or circumstances. All subsequent written and oral forward-looking statements attributed to the Company, or persons acting on its behalf, are qualified entirely by these cautionary statements.

About A. O. Smith

A. O. Smith Corporation, with headquarters in Milwaukee, Wisconsin, is a global leader applying innovative technology and energy-efficient solutions to products manufactured and marketed worldwide. Listed on the New York Stock Exchange (NYSE: AOS), the Company is one of the world's leading manufacturers of residential and commercial water heating equipment and boilers, as well as a manufacturer of water treatment products. For more information, visit www.aosmith.com.

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SOURCE A. O. Smith Corporation

FAQ

How much did A. O. Smith pay to acquire Leonard Valve (AOS) on January 6, 2026?

A. O. Smith agreed to a $470 million all-cash purchase price, valued at about $412 million after estimated tax benefits.

How was the Leonard Valve acquisition for AOS funded?

The acquisition was funded with cash borrowed under a new credit agreement.

What products and markets does Leonard Valve add to A. O. Smith (AOS)?

Leonard Valve provides water temperature control valves, thermostatic mixing systems, digital monitoring devices and Heat-Timer boiler controls for hospitals, schools and industrial customers.

What strategic benefits did A. O. Smith (AOS) cite for buying Leonard Valve?

A. O. Smith said the deal expands its water management presence, enhances digital expertise and broadens integrated offerings for commercial and institutional customers.

Are there disclosed risks to A. O. Smith shareholders from the Leonard Valve acquisition?

The company disclosed risks including potential failure to realize expected synergies and integration challenges, plus increased debt from the new credit agreement.

Who advised A. O. Smith on the Leonard Valve transaction announced January 6, 2026?

BofA Securities served as exclusive financial advisor and Foley & Lardner served as legal advisor.