Dive Brief:
- Dallas-based CSW Industrials plans to acquire Aspen Manufacturing for $313.5 million in a cash deal expected to broaden its product offerings for the heating, ventilation, air conditioning and refrigeration market.
- Texas-based Aspen generated $122.4 million in revenue last year, according to a release. The deal would allow Aspen to leverage CSW’s scale to fuel market growth. It is expected to close by the end of June.
- Aspen is one of the largest independent manufacturers of evaporator coils and air handlers for the residential HVAC/R industry. All of the company’s products are made in the United States.
Dive Insight:
The Aspen deal is the latest and largest of CSW’s acquisitions over the past year.
In November, the company bought “eco-friendly” plumbing company PF Waterworks for $40 million. Prior to that, CSW absorbed HVAC/R companies PSP Products and Dust Free for $40 million and nearly $30 million, respectively.
CSW is a manufacturer of heating and air, plumbing and electrical products, as well as smoke detectors, sealants, railings and other niche industrial goods and services, according to its website. The company has spent more than $1 billion on acquisition deals since spinning off from Capital Southwest in late 2015.
Company earnings have soared in recent months as construction demand grows. Total revenue increased nearly 11% to $193.6 million for the quarter ending Dec. 31, 2024, compared to a year ago, driven in part by CSW’s recent acquisition spree. Net income nearly tripled to $26.9 million over the same period last year.
The company has focused recently on expanding its contractor solutions division, where its HVAC/R and plumbing products are housed. The segment accounted for nearly 70% of CSW’s total revenue in the last quarter.
CSW CEO Joseph Armes addressed tariff concerns on a recent investor call, saying the company’s exposure to China’s retaliatory tariffs is in the low teens for the contractor solutions division and is “virtually nothing” in other businesses.
Vietnam is the company’s biggest exposure, Armes said on a call Jan. 30.
“We don't see a whole lot that would affect us directly, but we're watching that very carefully,” Armes said in terms of tariffs.
CSW has 26 locations across five countries, with most of its operations concentrated in the U.S., including facilities in Texas, Kansas, Washington, Pennsylvania, Florida and California.
Looking ahead, Armes said he expects 2025 to be “active from an M&A standpoint” and the company “will remain diligent and disciplined when evaluating its opportunities.”
“We will continue to identify and pursue accretive acquisitions of innovative companies and products that enhance our growth,” he said.
