Ferguson Turns The Valve On A $1.6 Billion Deal

Ferguson just signed off on a $1.6 billion deal designed to push the company deeper into the industrial economy. The plumbing and building-products distributor said Monday it will acquire FloWorks in cash, adding a business that generated approximately $1 billion in 2025 revenue and distributes highly technical valves and flow-control systems. Ferguson shares closed up about 2.6% at $233.28, as investors welcomed an acquisition that gives the company another route around a sluggish residential construction market.

FloWorks brings more than 60 locations across the U.S. and Canada, along with 25 service and repair centers and operations serving chemicals, refining, power generation, pharmaceuticals, semiconductors and data centers. That pushes Ferguson further into industries benefiting from some of the market’s strongest capital-investment trends, while adding recurring maintenance, repair and operations revenue that can continue after the original equipment is installed. The acquisition also increases Ferguson’s estimated addressable market to $400 billion from approximately $340 billion.

The deal carries a sturdy price tag, but Ferguson has built in several ways to justify it. The company valued the deal at approximately 10 times FloWorks’ trailing adjusted EBITDA after including about $45 million of expected synergies from logistics, technology and network improvements. Ferguson expects the acquisition to immediately add to adjusted earnings and says leverage will remain within its target range of one to two times adjusted EBITDA after closing. Ferguson entered the deal with net debt at only 1.0 times adjusted EBITDA and a newly authorized $2 billion buyback, giving it room to pursue FloWorks without stretching the balance sheet while preserving flexibility for capital returns.

The acquisition arrives at a useful moment for Ferguson’s business mix. Residential markets, which account for approximately half of Ferguson’s U.S. revenue, remained challenged during the first quarter, with residential sales declining 1%. Non-residential revenue increased 8%, supported by large capital projects and stronger bidding and shipment activity. FloWorks gives Ferguson more exposure to the side of the business showing the stronger momentum, particularly in industrial facilities and infrastructure. The deal still has to clear regulators before Ferguson can begin pursuing those expected synergies. Ferguson is not abandoning the jobsite; it is making sure its next leg of growth does not have to begin there.

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