SYDNEY--Plumbing fittings supplier Reliance Worldwide said it has agreed to a takeover offer by the private equity arm of Brookfield Asset Management that values its equity at 3.55 billion Australian dollars (US$2.52 billion).
Reliance Worldwide said Brookfield's latest offer of A$4.75 per share in cash follows three earlier bids. It represents a 32% premium to Reliance Worldwide's closing share price of A$3.61 on Monday.
Reliance Worldwide said it has agreed to let Brookfield carry out due diligence on an exclusive basis for a period of four weeks.
Brookfield's swoop on Reliance Worldwide comes after a sustained period of share-price weakness, with the stock down some 40% from its high in 2024. Investors in the company have been unsettled by U.S. tariff policy and a downturn in the housing sector as central banks globally have either raised rates or signaled their willingness to do so to contain inflation.
Reliance Worldwide reported a 0.7% fall in net sales to US$1.31 billion during the 12 months through June, representing its recently completed fiscal year. It achieved an annual net profit of US$6.3 million after absorbing some US$103.3 million of one-off items tied to an overhaul of its manufacturing footprint in Australia.
Directors of the company didn't declare a dividend, citing the Brookfield offer. Still, Reliance Worldwide said that if the deal doesn't proceed then it would consider paying out a dividend in 2027 out of its fiscal 2026 earnings.
"FY26 was a challenging year, with earnings impacted by U.S. tariffs, elevated copper costs, cost inflation and softer market conditions in the Americas and EMEA," said Heath Sharp, Reliance Worldwide's chief executive. "We responded with targeted price actions, cost reduction initiatives, further optimisation of our manufacturing footprint and product sourcing."
Reliance Worldwide said it didn't expect significant improvement in economic conditions in its major end markets.
Geopolitical events and U.S. trade policy are expected to continue to stoke cost inflation while also influencing movements in interest rates and consumer demand.
"Despite this weak economic outlook, Reliance Worldwide expects Group sales in FY27 to be up by mid to high-single digit percentage points relative to the prior corresponding period, driven by new product initiatives and price increases," the company said.
It also expects a broadly similar earnings before interest, tax, depreciation and amortization margin in fiscal 2027.
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