Brookfield targets Reliance Worldwide in $2.9bn deal

Brookfield Asset Management has made a proposal to acquire Australian plumbing products manufacturer Reliance Worldwide Corporation (RWC) in an all-cash transaction valuing the company at approximately AUD4.1bn ($2.9bn), according to a report by Bloomberg.

The indicative offer of AUD4.75 per share represents a 32% premium to RWC’s previous closing price. Shares rose as much as 23% in early Sydney trading to AUD4.43 following news of the proposal.

The potential acquisition would give Brookfield greater exposure to the US construction and residential markets, which account for roughly 60% of RWC’s revenue. The remainder of the company’s sales come from Asia-Pacific, Europe and the Middle East.

Founded in 1949, RWC is best known for its SharkBite range of push-to-connect plumbing fittings, which can be installed without specialist tools. The company also supplies a broader range of water control and plumbing products to residential and commercial markets.

Brookfield and RWC have entered an exclusive four-week period to negotiate and work towards a binding transaction. The proposal follows three approaches from Brookfield, with the initial bid of A$4.15 per share made in April. An eight-week due diligence process subsequently led to the latest, higher offer.

RWC has appointed Goldman Sachs as its financial adviser.