The 2020 Mid-Year Economic Update_long

Pentair CEO: Company has $1B for Acquisitions in 2015

While capacity is high, Pentair will "remain disciplined" about finding deals that make sense.
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The ongoing consolidation story grew more intriguing last week when Pentair CEO Randy Hogan, during an earnings call with analysts to discuss the company's 2014 and 4Q earnings, said it had $1 billion worth of capacity for acquisitions this year.

But, Hogan said, Pentair will spend that money wisely.

"We are going to remain disciplined," Hogan said. "We (have) five questions we always go through which is, how does it fit our strategy? Number two, how do the financials work? Number three, why are we the right buyer? Where is the value? And actually we have more to offer there now with our capital structure and tax structure and our domicile. We actually have more unique opportunities to bring to play there. And then, what's the integration plan?"

Hogan said the company's 2012 merger with Tyco International's flow control business presented a blueprint for the company as it remains on the lookout for attractive opportunities.

"We are not going to rush anything but we certainly up on our toes, on our balls of our feet looking out," Hogan said.

Pentair isn't alone. Other companies have hinted at more acquisitions and recent polls indicate that the market is ripe for additional consolidation. And it's not just companies looking to snatch up competitors, either. David J. Manthey, senior research analyst, industrial distribution services, Robert W. Baird & Co., said during the recent MDM Webcast, 2015 Distribution Industry Outlook, to expect activity from private equity firms, which have $465 billion to spend on M&A.

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