Kewdale-based manufacturer Australian Valve Group has been bought by a major US-based competitor seeking to build its share of the Australian market.
Kewdale-based manufacturer Australian Valve Group, which shot to prominence two years ago after helping to solve water supply problems at Perth Children’s Hospital, has been bought by a major US-based competitor seeking to build its share of the Australian market.
US-based Watts Water Technologies has bought AVG in an all-cash transaction. The terms were not disclosed.
The three founders of AVG, including chief executive Julian Anderson and director Peter Morris, are expected to continue in the business.
AVG has been designing and developing a range of heating control valves for over 18 years.
It has established a nation-wide distribution network and achieved market acceptance with products like the Quickie Kit, Pressure Limiting Valves and MAXI e-stop.
The company won praise from premier Mark McGowan in 2018 for developing plastic valve fittings that were used at Perth Children’s Hospital.
The plastic valves replaced the corroded brass fittings that were partly attributed to leaking lead into the hospital’s water.
Watts Water Technologies is a global manufacturer that provides a broad range of plumbing, heating, and water quality product lines.
The company’s president Asia-Pacific, the Middle East and Africa Elie Melhem said “aquiring AVG will allow us to expand our product breadth and provide greater channel access to the strategically important Australian market”.
“We are excited to team with AVG to continue to supply our customers with superior products and solutions,” he said.
The combined business is expected to be better placed to compete against market leader Reliance Industries.
In a statement, the founders of AVG said they felt the time was right to partner with a global business to provide capital for continued growth of AVG’s products, as well as access to Watts’ extensive catalogue.
“The transaction is a natural fit for both parties,” Mr Anderson said.
“Both businesses align around the importance of investing in design and innovation, and Watts are keen to support AVG’s growth strategy in Asia Pacific with their strong balance sheet and suite of new products in the local market.”
BDO’s Perth M&A team was engaged by AVG as the exclusive sell-side advisor for the transaction.
BDO partner Todd Grover said the transaction faced a number of challenges, including a referral to the Foreign Investment Review Board.
“The circumstances were more challenging than most with a global pandemic and the transaction being referred to FIRB for clearance,” Mr Grover said.
“In addition, with the Watts deal team being in both Boston and Shanghai, and the AVG executive in Perth and Melbourne, we needed everyone to embrace a technological solution and by doing so we were able to successfully complete at 30 June.”
