CSW Industrials Completes Previously Announced Accretive, Synergistic Acquisition of Aspen Manufacturing
- Strategic expansion of HVAC/R product portfolio with market-leading evaporator coils and air handlers
- Acquisition expected to drive above-market growth and enhance long-term shareholder value
- Addition of 350 skilled employees strengthening workforce
- Strong synergy potential through leveraging CSW's distribution channels and go-to-market strategy
- Target company has solid EBITDA of $28.5 million (2024)
- Significant cash outlay of $313.5 million and increased debt through credit facility
- Integration risks with new workforce and operations
- Relatively high purchase multiple at 11x EBITDA
Insights
CSW's $313.5M acquisition of Aspen Manufacturing adds $28.5M EBITDA at 11x multiple, strengthening HVAC/R portfolio with complementary products.
CSW Industrials has completed its $313.5 million cash acquisition of Aspen Manufacturing, representing an 11x multiple on Aspen's 2024 adjusted EBITDA of $28.5 million. The financing structure leverages both cash on hand and the company's existing $500 million revolving credit facility, while apparently maintaining balance sheet strength—a prudent capital allocation approach.
This transaction appears strategically sound from a financial perspective. The 11x EBITDA multiple sits within reasonable valuation parameters for quality HVAC assets, neither bargain-priced nor overly expensive. The immediate addition of Aspen's substantial EBITDA contribution should enhance CSW's earnings profile, though specific accretion timelines and magnitudes aren't quantified.
The integration brings 350 new employees and expands CSW's HVAC/R product suite with complementary offerings in a familiar market vertical. This adjacency expansion should allow for effective resource utilization, channel optimization, and operational synergies—particularly with Aspen's U.S.-based manufacturing footprint.
While the press release doesn't specify exact post-acquisition leverage metrics, management's statement about maintaining "sufficient liquidity and a strong balance sheet" suggests the transaction won't overburden the company's financial foundation. The strategic expansion into complementary product lines while preserving financial flexibility represents a well-balanced growth approach.
Strategic acquisition expands CSW's HVAC/R portfolio with Aspen's evaporator coils and air handlers, creating significant cross-selling opportunities.
CSW's acquisition of Aspen Manufacturing represents a textbook vertical integration play within the HVAC/R ecosystem. By incorporating Aspen's market-leading evaporator coils, blowers, and air handling units into its product portfolio, CSW gains critical components that complement its existing offerings and create a more comprehensive solution for distributors and end users.
The strategic value lies in the expanded footprint across the HVAC/R value chain. Aspen's specialization in residential and light commercial applications—spanning single-family, multi-family, and manufactured homes—fills important product gaps in CSW's lineup. This broader product range should enhance CSW's position with distributors who prefer comprehensive suppliers.
Manufacturing synergies appear substantial. With all Aspen products designed, engineered, and assembled in the United States at their Humble, TX facility, CSW gains domestic production capabilities that align with increasing market preference for U.S.-manufactured components. The addition of Aspen's workforce brings specialized expertise in coil manufacturing—a technically demanding process requiring specialized equipment and know-how.
The acquisition strengthens CSW's competitive positioning against larger HVAC conglomerates by expanding their "share of wallet" with existing customers. For HVAC contractors and distributors, the combined entity offers a more complete package of components, potentially streamlining their supply chain and increasing CSW's value proposition in a consolidating industry landscape.
DALLAS, May 01, 2025 (GLOBE NEWSWIRE) -- CSW Industrials, Inc. (Nasdaq: CSWI) (the “Company” or “CSW”) today announced the Company has completed the previously announced acquisition of Aspen Manufacturing for approximately
This strategic acquisition expands CSW Industrial’s HVAC/R product offering with the incorporation of Aspen Manufacturing’s market leading evaporator coils and air handlers. By leveraging CSW’s deep experience in the HVAC/R market, strong distribution channels, successful go-to-market strategy, and demonstrated track record of industrial manufacturing, this acquisition is expected to drive market and customer share of wallet gains, while providing an enhanced service offering and maximizing channels to market.
Aspen Manufacturing’s current product suite includes a vast range of high-quality residential and light commercial evaporator coils, blowers, and air handling units for single-family, multi-family, and manufactured homes. Based in Humble, TX, all of Aspen’s products are designed, engineered, and assembled in the United States.
Joseph B. Armes, Chairman, President, and Chief Executive Officer of CSW Industrials, commented, “We are pleased to have consummated the Aspen Manufacturing acquisition and to welcome approximately 350 new colleagues to the CSW Industrials family. By adding Aspen Manufacturing, CSW expects to further drive above-market growth through the expansion of our highly profitable and resilient HVAC/R product portfolio thereby enhancing long-term value for all of CSW’s shareholders.”
For additional information about CSW Industrials’ acquisition of Aspen Manufacturing, please visit the previously released transaction documents, including the March 18, 2025 press release and investor presentation, which are both available on the Company’s website at https://cswindustrials.gcs-web.com.
Safe Harbor Statement
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. Words or phrases such as "may," "should," "expects," "could," "intends," "plans," "anticipates," "estimates," "believes," "forecasts," "predicts" or other similar expressions are intended to identify forward-looking statements, which include, without limitation, earnings forecasts, effective tax rate, statements relating to our business strategy and statements of expectations, beliefs, future plans and strategies and anticipated developments concerning our industry, business, operations, and financial performance and condition.
The forward-looking statements included in this press release are based on our current expectations, projections, estimates, and assumptions. These statements are only predictions, not guarantees. Such forward-looking statements are subject to numerous risks and uncertainties that are difficult to predict. These risks and uncertainties may cause actual results to differ materially from what is forecast in such forward-looking statements, and include, without limitation, the risk factors described from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K.
This press release contains estimated results of Aspen Manufacturing for the calendar year 2024 (the “estimated results”). The estimated results are forward-looking statements based on Aspen Manufacturing’s management’s preliminary, unaudited results as of the date hereof, and Aspen Manufacturing’s actual results may be materially different from the estimated results. We assume no obligation to update any forward-looking statement as a result of new information, future events or other factors. Accordingly, you should not place undue reliance on the estimated results. Our independent registered public accounting firm has not audited, reviewed or performed any procedures with respect to the estimated results and does not express any opinion or any other form of assurance with respect thereto.
All forward-looking statements included in this press release are based on information currently available to us, and we assume no obligation to update any forward-looking statement except as may be required by law.
About CSW Industrials
CSW Industrials is a diversified industrial growth company with industry-leading operations in three segments: Contractor Solutions, Specialized Reliability Solutions, and Engineered Building Solutions. The Company provides niche, value-added products with two essential commonalities: performance and reliability. The primary end markets we serve with our well-known brands include: HVAC/R, plumbing, electrical, general industrial, architecturally-specified building products, energy, mining, and rail transportation. For more information, please visit www.cswindustrials.com.
Investor Relations
Alexa Huerta
Vice President, Investor Relations, & Treasurer
214-489-7113
alexa.huerta@cswindustrials.com
FAQ
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