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Brookfield Asset Management offered to buy Reliance Worldwide Corp. in an all-cash deal that values the Australian plumbing supplies company at around A$4.1 billion (US$2.9 billion).
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The offer values Reliance Worldwide shares at A$4.75 each, a 32 per cent premium to Monday’s closing price, the company said in a statement Tuesday. The stock jumped 23 per cent to A$4.43 at the start of trading in Sydney.
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Buying Reliance Worldwide would give Brookfield exposure to the U.S. construction and housing market, which generates around 60 per cent of Reliance’s revenue, with the rest split between the Asia-Pacific region, Europe and the Middle East. The Australian firm, which traces its roots back to 1949, is best known for its Sharkbite push-to-connect plumbing fittings that eliminate the need for specialist tools.
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Brookfield has a wide array of assets in Australia, spanning real estate, infrastructure and private equity. In December, it agreed to buy National Storage REIT in partnership with Singapore’s GIC Pte, and also owns electricity and gas distribution network AusNet Services and fiber-cabling firm Uniti.
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Brookfield and Reliance Worldwide will now engage exclusively for four weeks to complete a binding deal. The agreement comes after Brookfield made three earlier approaches, starting at A$4.15 per share in April. That led to eight weeks of due diligence that resulted in the “meaningfully improved proposal,” Reliance Worldwide said.
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Goldman Sachs Group Inc. is advising Reliance Worldwide.
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Separately, Reliance Worldwide said full-year adjusted net income fell 15 per cent to US$125.1 million, dragged down by U.S. tariffs, higher input costs and weaker demand in the U.S. and U.K.
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