Deal involving Quebec-based water heater manufacturer said to contribute to decarbonization efforts
Wisconsin-based water technology company A.O. Smith Corporation has taken over Giant Factories, Inc. under a US$192-million asset purchase deal.
A.O. Smith announced Tuesday that it has acquired the Quebec-based water heater manufacturer, Giant Factories, Inc. The purchase price is approximately US$192 million, payable in cash. The deal is also subject to customary adjustments which include an expected tax benefit of $6.5 million arising out of the asset purchase transaction.
A.O. Smith is a global manufacturer of residential and commercial water heaters and boilers. The company is present in the U.S., Canada, Mexico, China, India, the U.K., the Netherlands and Turkey. It also has sales and distribution operations in more than 60 countries. The acquisition of Giant will expand A.O. Smith’s existing presence in the Canadian water heater market.
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"The addition of Giant strengthens our leadership position as a global supplier of residential and commercial water heaters. The acquisition also supports our corporate strategy by increasing our North America market penetration, creating additional capacity and enhancing our distribution capabilities," said Kevin J. Wheeler, Chairman and Chief Executive Officer of A.O. Smith.
Established in 1945 as a family-owned business, Giant operates two water heater manufacturing facilities in Montreal and employs more than 300 people. The company has a trailing twelve-month sale of US$105 million.
According to A.O Smith, the acquisition will help its decarbonization efforts. Consumers of Giant products are mainly served by a hydro-sourced and non-carbon intensive energy grid which will have the effect of increasing the amount of water heating products in A.O. Smith’s portfolio that are supplied by a renewable energy grid.
Claude Lesage, President of Giant Factories, Inc. said, "We are extremely excited about the benefits of a powerful combination with a world leader in global water technology. This natural and logical partnership with A. O. Smith will enhance prospects for our customers, employees, and suppliers."
