Watts Water Buys I-CON Systems to Expand Digital Plumbing Solutions

Acquisition and Market Expansion - Watts Water Technologies, Inc. (WTS) has acquired I-CON Systems Inc., a leading provider of plumbing control solutions for the corrections market, fully funded with cash on hand [1] - I-CON has estimated annualized sales revenues of $25 million and specializes in vandal-proof, cost-effective water management systems tailored for correctional facilities, which will enhance WTS' portfolio [2] - The acquisition is expected to positively contribute to WTS' revenue stream and diversify its market presence, focusing on innovation and long-term growth opportunities [3] Recent Acquisitions and Financial Performance - WTS is actively pursuing acquisitions to sustain top-line momentum, having recently acquired Josam Company, which has annualized revenues of approximately$35 million, and Bradley Corporation for $303 million [4] - The acquisitions of Bradley and Josam contributed$59 million to sales in the Americas region for Q3 2024, with anticipated acquired sales from these companies in the range of $205-$210 million for 2024 [5] - WTS reported a year-over-year sales increase of 8% to $543.6 million, surpassing the Zacks Consensus Estimate by 0.9% [6] Financial Outlook Adjustments - Following recent momentum, WTS has raised the midpoint of its operating margin forecast by 20 basis points and narrowed its sales guidance, expecting reported sales growth of 9% to 10% [7] - Organic sales are anticipated to decline by 1% to 2%, a revision from the previous forecast of a 7-12% increase in reported sales and a potential organic sales decline of 4% to an increase of 1% [7] Stock Performance - WTS currently holds a Zacks Rank 3 (Hold), with shares rising 2.5% over the past year, compared to a sub-industry growth of 5.1% [8]