AO Smith has completed the $418 million (£260m) acquisition of fellow water heating and boiler manufacturer Lochinvar.
The merger of these two US-based firms allows AO Smith to diversify into high efficiency boilers and expand its range of water heating products. The market for high efficiency condensing systems is growing rapidly in the US and around the world with $200m turnover Lochinvar already a significant player in that sector.
David Pepper, managing director of Lochinvar's Banbury-based UK subsidiary, said: 'We see this as a wholly positive development. We have already been told that the new owners intend to maintain the two brands and run the companies as separate businesses because of their respective strengths in the global heating marketplace. Being part of an enlarged group will bring additional commercial benefits to Lochinvar as an established manufacturing, sales and distribution business with 35 years experience in the UK.'
Lochinvar CEO Bill Vallett said the alliance was 'a very good fit for both companies given our complementary product offerings' and AO Smith CEO and chairman Paul Jones said he was delighted the Vallett family, who founded Lochinvar, had agreed to remain as part of the enlarged group's management team.
