DALLAS - CSW Industrials, Inc. (NASDAQ:CSWI), a $4.91 billion industrial company with a "GREAT" financial health rating according to InvestingPro, has announced a definitive agreement to purchase Aspen Manufacturing for approximately $313.5 million in cash. The transaction is expected to be immediately accretive to CSWI’s earnings per share (EPS) and earnings before interest, taxes, depreciation, and amortization (EBITDA).
Aspen Manufacturing, a Humble, Texas-based company, specializes in the production of evaporative coils and air handlers for the heating, ventilation, air conditioning, and refrigeration (HVAC/R) industry. This acquisition is projected to enhance CSWI’s product portfolio within the lucrative HVAC/R market. Aspen’s estimated revenues for 2024 stand at $122.4 million, with its products being entirely designed, engineered, and assembled in the United States. The acquisition aligns with CSWI’s growth trajectory, which has shown strong revenue growth of 10.41% over the last twelve months.
The acquisition aligns with CSWI’s strategy to leverage existing distribution channels, increase market share in the HVAC/R sector, and grow its share of wallet with current customers. The purchase price represents roughly 11 times Aspen Manufacturing’s estimated 2024 adjusted EBITDA of $28.5 million. According to InvestingPro analysis, CSWI currently trades at an EV/EBITDA multiple of 21.37x, suggesting the Aspen acquisition comes at a relatively attractive valuation multiple.
CSWI plans to fund the acquisition through a combination of cash on hand and debt under its existing $500 million credit facility. The transaction is slated to close in the first quarter of CSWI’s 2026 fiscal year, pending customary closing conditions and regulatory approvals.
Joseph B. Armes, Chairman, President, and CEO of CSWI, expressed confidence in the acquisition, stating it would build upon CSWI’s market leadership in HVAC/R and accelerate Aspen’s growth strategy. Jeff Underwood, Senior Vice President of CSWI and General Manager, Contractor Solutions, also welcomed the integration of Aspen into the RectorSeal family, which is part of CSWI’s lineup of HVAC/R, plumbing, and electrical products.
Aspen Manufacturing is noted for its ability to manufacture products compatible with both legacy and new refrigerants, utilizing copper and aluminum heat transfer technologies. This positions Aspen to support distributors and contractors in servicing existing air conditioning systems.
This news is based on a press release statement from both companies involved. The forward-looking statements included in the release are subject to various risks and uncertainties and are not guarantees of future performance. For deeper insights into CSWI’s valuation, financial health, and growth prospects, investors can access the comprehensive Pro Research Report available exclusively on InvestingPro, which provides detailed analysis of this and 1,400+ other US stocks.
In other recent news, CSW Industrials reported its third-quarter fiscal year 2025 earnings, exceeding expectations with an adjusted earnings per share of $1.48, surpassing the forecasted $1.43. The company’s revenue also beat projections, reaching $194 million compared to the anticipated $191.87 million. This marks an 11% year-over-year increase in revenue, driven by strong demand in its Contractor Solutions segment. The company achieved a gross profit margin of 41.4%, despite facing increased freight expenses.
CSW Industrials has been actively pursuing strategic acquisitions, such as the recent purchase of Waterworks, to bolster its product offerings. Analysts from Truist Securities have initiated coverage of CSW Industrials with a Hold rating and set a price target of $362.00, reflecting the company’s consistent organic growth and strategic acquisitions. The firm highlights CSW Industrials’ diversified revenue stream across multiple end markets. These developments indicate CSW Industrials’ ongoing efforts to maintain a competitive position and deliver strong financial results.
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