Pentair lines up $1.4B loans for Taco deal
Pentair secures $1.4 billion in new term loan facilities with leverage and coverage covenants to support its planned Taco Group Holdings acquisition.
Rhea-AI Filing Summary
PENTAIR plc (PNR) entered into a new credit agreement to help finance its pending acquisition of Taco Group Holdings for $1.425 billion. The agreement provides Pentair Finance S.à r.l. with a $400 million senior unsecured tranche 1 term loan facility and a $1.0 billion senior unsecured tranche 2 term loan facility, both guaranteed by Pentair and Pentair, Inc. Availability of the loans is conditioned on closing the Taco acquisition, no material adverse effect at Taco since July 27, 2026, delivery of specified financial information and certificates, and refinancing certain Taco debt. Tranche 1 will generally mature 18 months after the Taco closing, while Tranche 2 matures on May 5, 2030. The facilities bear interest at an adjusted base rate or Term SOFR plus a margin tied to Pentair’s leverage or Pentair Finance’s public rating and include covenants limiting leverage to 3.75x EBITDA (or 4.25x for four periods after certain acquisitions) and requiring interest coverage of at least 3.0x.
Positive
- None.
Negative
- None.
Filing Explained
As of September 1, no term loans were outstanding; the agreement adds conditional debt capacity, not current borrowing.
Pentair reports a September 1 credit agreement providing
Pentair Finance intends to borrow the full
Beginning
8-K Event Classification
Key Figures
Key Terms
Term SOFR financial
ticking fee financial
material adverse effect regulatory
EBITDA financial
events of default financial
consolidated cash interest expense financial
FAQ
What new financing did PNR arrange in connection with the Taco acquisition?
How will Pentair (PNR) use the $1.4 billion term loan facilities?
What are the key financial covenants in Pentair’s new credit agreement?
When do Pentair’s new term loan tranches mature?
What are the conditions to Pentair drawing on the new term loan facilities?
Does Pentair pay any fee if it does not draw the term loans immediately?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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| ITEM 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
As previously announced, on July 27, 2026, Pentair plc (“Pentair”) entered into a definitive agreement (the “Purchase Agreement”) to acquire the issued and outstanding equity securities of Taco Group Holdings (“Taco”), for a purchase price of $1.425 billion, subject to customary adjustments contemplated by the Purchase Agreement (the “Taco Acquisition”).
On September 1, 2026, in contemplation of the Taco Acquisition, Pentair and its subsidiaries Pentair Finance S.à r.l. (“Pentair Finance”) and Pentair, Inc. (“Pentair U.S.”) entered into a Credit Agreement (the “Agreement”), among Pentair Finance, as borrower, Pentair and Pentair U.S., as guarantors, and the lenders and agents party thereto, providing for (i) a $400.0 million senior unsecured tranche 1 term loan facility (the “Tranche 1 Term Loan Facility”) and (ii) a $1.0 billion senior unsecured tranche 2 term loan facility (the “Tranche 2 Term Loan Facility”; together with the Tranche 1 Term Loan Facility, the “Term Loan Facilities”). As of September 1, 2026, no loans were outstanding under the Term Loan Facilities. Pentair Finance intends to borrow the full $1.4 billion aggregate principal amount available under the Term Loan Facilities to finance a portion of the purchase price in the Taco Acquisition, to pay related fees and expenses, and to refinance certain outstanding indebtedness of Taco. The availability of loans under the Term Loan Facilities is subject to the satisfaction or waiver of certain conditions, including, among other things, (i) the closing of the Taco Acquisition substantially concurrently with the funding of such loans, (ii) the absence of a material adverse effect with respect to Taco since July 27, 2026, (iii) the truth and accuracy in all material respects of certain representations and warranties, (iv) the receipt of certain certificates, (v) the receipt of certain financial statements, and (vi) the refinancing of certain outstanding indebtedness of Taco on or prior to the date of the closing of the Taco Acquisition. Beginning November 24, 2026, Pentair Finance will pay a ticking fee to each lender under the Agreement of 0.125% per annum on the amount of such lender’s daily undrawn term loan commitments.
The lenders’ commitment to make the Term Loan Facilities available to Pentair Finance expires on the earliest of (i) the date that is five business days after the “Outside Date” (as defined in the Purchase Agreement), (ii) the date of the closing of the Taco Acquisition after giving effect to the full funding of the term loans on such date, (iii) the date that the Purchase Agreement expires in accordance with its terms or the obligations of Pentair to consummate the Taco Acquisition under the Purchase Agreement terminate in accordance with its terms and notice of same is given to the administrative agent under the Agreement, (iv) December 31, 2026, and (v) the date set forth in a written notice from Pentair Finance to the administrative agent and the lenders of Pentair Finance’s election to terminate all term loan commitments in full.
The Term Loan Facilities are guaranteed by Pentair and Pentair U.S. The Term Loan Facilities bear interest at a rate equal to an adjusted base rate or Term SOFR, plus, in each case, an applicable margin. The applicable margin is based on, at Pentair Finance’s election, Pentair’s leverage level or Pentair Finance’s public credit rating. Interest on borrowings are generally payable in arrears (i) quarterly, (ii) monthly, or (iii) at the end of the interest period, unless such interest period is longer than three months, in which case payment is due on each successive date three months after the first day of such period.
With certain exceptions, outstanding term loans under (i) the Tranche 1 Term Loan Facility will mature on the date that occurs 18 months after the closing date of the Taco Acquisition and (ii) the Tranche 2 Term Loan Facility will mature on May 5, 2030. Pentair Finance is permitted to voluntarily prepay loans and/or reduce the commitments under the Term Loan Facilities, in whole or in part, without penalty or premium, subject to certain minimum amounts and increments and the payment of customary breakage costs. No mandatory prepayment will be required under the Term Loan Facilities.
The Agreement contains financial covenants requiring Pentair not to permit (i) the ratio of its consolidated debt (net of its consolidated unrestricted cash and cash equivalents in excess of $5.0 million but not to exceed $250.0 million) to its consolidated net income (excluding, among other things, non-cash gains and losses) before interest, taxes, depreciation, amortization and non-cash share-based compensation expense (“EBITDA”) on the last day of any period of four consecutive fiscal quarters (each, a “testing period”) to exceed 3.75 to 1.00 (or, at Pentair Finance’s election and subject to certain conditions, 4.25 to 1.00 for four testing periods in connection with certain material acquisitions) and (ii) the ratio of its EBITDA to its consolidated cash interest expense for the same period to be less than 3.00 to 1.00. In addition, subject to certain qualifications and exceptions, the Agreement also contains covenants that, among other things, restrict Pentair’s ability to create liens, merge or consolidate with another person, make acquisitions and incur subsidiary debt.
The Agreement contains customary events of default. If an event of default occurs and is continuing, then the lenders may terminate all commitments to extend further credit and declare all amounts outstanding under the Agreement due and payable immediately. In addition, in the case of an event of default arising from certain events of bankruptcy, insolvency or reorganization, all amounts outstanding under the Agreement will automatically become due and payable immediately.
The foregoing description of the Agreement is qualified in its entirety by reference to the full text of the Agreement filed as Exhibit 4.1 to this Current Report on Form 8-K, which is incorporated by reference herein.
| ITEM 9.01 | Financial Statements and Exhibits |
| (a) | Financial Statements of Businesses Acquired |
Not applicable.
| (b) | Pro Forma Financial Information |
Not applicable.
| (c) | Shell Company Transactions |
Not applicable.
| (d) | Exhibits |
The exhibits listed in the Exhibit Index below are filed as part of this report.
EXHIBIT INDEX
| Exhibit No. | Description | |
| 4.1 | Credit Agreement, dated as of September 1, 2026, among Pentair plc, Pentair Finance S.à r.l., Pentair, Inc. and the lenders and agents party thereto. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on September 2, 2026.
| PENTAIR PLC | ||
| Registrant | ||
| By: | /s/ Lance T Bonner | |
| Lance T Bonner | ||
| Executive Vice President, General Counsel and Secretary | ||