Key Takeaways:
Ferguson's $1.6 billion acquisition of FloWorks marks its largest bet yet on industrial flow-control markets beyond construction.
Ferguson Enterprises Inc. agreed to acquire FloWorks from private equity firm Wynnchurch Capital L.P. for about $1.6 billion in cash, the plumbing and water distributor said Monday, expanding into higher-growth industrial end markets including data centers and semiconductors.
"This acquisition strengthens our position in high-growth industrial end markets while adding meaningful capabilities and geographic coverage," said Kevin Murphy, chief executive officer of Ferguson. The Newport News, Virginia-based company expects the deal to generate about $45 million in annual synergies from network optimization, logistics and technology.
FloWorks, which generated roughly $1 billion in revenue in 2025, operates more than 60 locations across the United States and Canada with a focus on the Gulf Coast and southern states. The company distributes valves, automation equipment and specialty flow-control solutions used to regulate liquids, gases and steam through industrial pipelines, serving chemicals, refining, power generation, pharmaceuticals and data center customers. Ferguson said the transaction represents an acquisition multiple of about 10 times FloWorks' last-12-month adjusted EBITDA including expected synergies.
The deal reflects Ferguson's push to diversify beyond its core residential and commercial construction markets, where it generated $31.3 billion in sales last year across more than 1,700 locations with about 35,000 associates. The company expects to remain within its targeted net debt-to-adjusted EBITDA range of 1 to 2 times after closing, which is expected in the third quarter of 2026 subject to regulatory approvals. J.P. Morgan Securities served as Ferguson's financial adviser, with Orrick, Herrington & Sutcliffe providing legal counsel and Kirkland & Ellis advising on financing.
FloWorks Chief Executive Officer Scott Jackson said joining Ferguson "ensures our 65-plus year legacy continues with a partner that shares our commitment to customer service and operational excellence." The Houston-based company employs more than 1,000 associates across 25 service and repair centers and a portfolio of 15 brands. Wynnchurch, which acquired a majority stake in FloWorks from Clearlake Capital in 2023, manages about $9.1 billion in assets and has been exiting industrial investments including the recent $1.035 billion sale of Labrie Environmental Group to Hiab Corporation.
The acquisition comes as Ferguson simplifies its corporate structure. The company said in June it would cancel its secondary listing in London to cut costs and streamline governance, leaving the New York Stock Exchange as its sole trading venue after shifting its primary listing there in 2022. Ferguson shares rose more than 2 percent in early trading Monday.
For Ferguson, the deal addresses a structural challenge: its heavy reliance on the $340 billion North American residential and non-residential construction market, which is sensitive to interest rates and housing cycles. Adding FloWorks' recurring maintenance, repair and operations-driven revenue stream provides a more predictable earnings base less tied to new construction starts. The expanded exposure to data centers and semiconductors also taps into secular demand trends driven by artificial intelligence infrastructure buildout and onshoring of chip manufacturing.
This article is for informational purposes only and does not constitute investment advice.
