Australia’s Reece to buy U.S. plumbing equipment supplier for $1.4 billion

(Reuters) – Australian Reece Ltd (REH.AX) said on Monday it would buy U.S.-based plumbing and waterworks equipment distributor MORSCO Inc. for an all-cash enterprise value of $1.44 billion.

The deal would be funded through a combination of cash and debt, Reece said in a statement. It also announced a A$560 million ($421.6 million) equity raise.

A bulk of the funding, however, would come from an underwritten $1.14 billion secured credit facility.

“The transaction provides Reece with a strategic platform in the fast-growing U.S. Sun Belt region,” it said.

The company said it would operate MORSCO separately from its Australian and New Zealand businesses, and retain the U.S. management.

($1 = 1.3282 Australian dollars)

Reporting by Rushil Dutta in Bengaluru; Editing by Stephen Coates

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