(RTTNews) - Advanced Drainage Systems, Inc. (WMS), a manufacturer of water management products and solutions, on Thursday announced the acquisition of Infiltrator Water Technologies for a purchase price of about $1.08 billion, from an affiliate of the Ontario Teachers' Pension Plan and other stockholders. Infiltrator is a provider of on-site septic wastewater treatment.
Infiltrator provides plastic leach field chambers and systems, septic tanks and accessories, primarily for use in residential applications. The company's products used in on-site water treatment systems in the U.S. and Canada.
Infiltrator generated approximately $275 million in revenue as well as $89 million in adjusted EBITDA during 2018. The company has been a longstanding supplier and customer of ADS for over 15 years.
ADS noted that the acquisition will combine Infiltrator's on-site septic wastewater management with ADS' core stormwater-focused platform. This will extend ADS' addressable opportunity into the attractive and related on-site septic business.
Under the terms of the agreement, ADS paid a purchase price of about $1.08 billion.
The company has initially funded the transaction with drawings under a senior secured credit facility arranged by Barclays and Morgan Stanley Senior Funding, Inc.
On a pro forma basis for ADS' fiscal year ended March 31, 2019, the combined companies would have had revenues of approximately $1.6 billion, adjusted EBITDA margins of approximately 20.4 percent, and free cash flow conversion of nearly 50 percent.
ADS' management anticipates the acquisition will be accretive to adjusted EBITDA in year one, accretive to earnings per share in the first full year and yield approximately $20 million to $25 million in run-rate synergies by year three.
ncG1vNJzZmilkae4psDSZ5muq5mjsrS%2FyKeqopyVp3uku8xopZ6vo2TAtbvCpKpomZSrrq%2BvxJ1knaqRnruis8RmqrKrpJq6tHnBrrCsZZmjs6q406uYraeiYsSiwMSrZK2dk527sLjOoKCeq12bvLN5kGZncWWSobtufY9rb21oZ2x9eA%3D%3D