First Read: Ferguson Enterprises, Inc. "FERG to Acquire FloWorks" (Neutral)

Research evidence excerpt

First Read: Ferguson Enterprises, Inc. "FERG to Acquire FloWorks" (Neutral)

Global Research

13 July 2026ab

First Read

EquitiesFerguson Enterprises, Inc.

FERG to Acquire FloWorks United States

Home Construction

12-month rating Neutral *

FERG has entered into a definitive agreement to acquire FloWorks

FERG announced an agreement to acquire FloWorks, a leading non-residential 12m price target US$252.00

distributor and service provider of highly engineered valves and flow control solutions,

for $1.6 billion in cash (link). Management highlighted the transaction as a strategic step

Price (10 Jul 2026) US$227.46

to strengthen Ferguson's position in attractive, high growth industrial end markets by

expanding its technical capabilities and geographic coverage. The company expects to RIC: FERG.N BBG: FERG US

realize ~$45mm of revenue and cost synergies from the deal and noted significant sales Trading data and key metrics

synergy opportunities across its Industrial, Commercial Mechanical & Waterworks

52-wk range US$267.71-211.61

customer groups. FERG paid roughly ~10x LTM EBITDA post synergies, which implies a

Market cap. US$44.3b

pre-synergy LTM EBITDA multiple of roughly ~14x. FERG expects the deal to close in

Shares o/s 195m (COM)

3Q26 and for it to be immediately accretive to adj EPS. Additionally, the company noted

that it expects to remain within its target net debt to adj EBITDA range of 1x-2x post Free float 100%

close. We view this deal favorably as M&A activity continues to increase across the Avg. daily volume ('000) 397

distribution industry in particular in 2026. Furthermore, FERG continues to expand its Avg. daily value (m) US$94.5

offering across the large capital projects opportunity set. Common s/h equity (12/26E) US$6.36b

P/BV (12/26E) 6.9x