Reece Limited (ASX:REH) entered into binding agreement to acquire MORSCO Inc. from Advent International Corporation and other co-owners for $1.4 billion on May 7, 2018. The consideration represents an all cash enterprise value for MORSCO Inc. The acquisition is expected to be predominately funded by an underwritten $1.14 billion 7-year senior secured credit facility from the US institutional term loan market and new equity of AUD 560 million ($421.1 million equity-raising (including an AUD 421 million ($316.6 million) entitlement offer and an AUD 139 million ($104.5 million) placement, both fully underwritten). The senior secured credit facility is supported by a $100 million 5-year revolving credit facility (undrawn at acquisition). The Wilson Family, the major shareholder of Reece is supportive of the acquisition and will subscribe for AUD 300 million ($225.6 million) of shares as part of the equity raising. As on May 9, 2018, the equity financing has been increased to AUD 600 million ($451.3 million, including an AUD 421 million ($316.6 million) entitlement offer and an AUD 179 million ($134.6 million) placement, both fully underwritten). Reece intends to operate MORSCO separately to its businesses in Australia and New Zealand. MORSCO achieved adjusted sales of $1.72 billion in the twelve months ended December 31, 2017. Reece intends to keep the existing MORSCO management team in place under refreshed contractual terms under the leadership of Chip Hornsby, Chief Executive Officer of MORSCO. Reece intends to deploy some of its own team members to the US with a view to long term collaboration and sharing of industry knowledge and expertise. It is proposed that Sasha Nikolic, Chief Financial Officer of Reece will be Reece’s senior operational representative in the US as Project Manager. Gavin Street, Chief Digital & Data Officer and Company Secretary of Reece will transition back to the Chief Financial Officer role. The transaction is subject to regulatory approvals including antitrust and other customary conditions and is expected to complete in July 2018. Following the acquisition, Reece expects to deliver mid-high single digit EPS accretion in its first full year of ownership on an NPATA basis. No synergies have been assumed in the acquisition metrics. JPMorgan Chase & Co. (NYSE:JPM) and Ernst & Young Transaction Advisory Services Limited acted as joint financial advisor and DLA Piper Australia Pty Ltd and Allens acted as legal advisors for Reece. Robert Pick, Yan-Lin Lee, Nicholas Twomey and John Jacob of Allens acted as legal advisor for Reece on its equity raising to fund the transaction. Barclays and RBC Capital Markets, LLC acted as financial advisors and Marilyn French Shaw, Jacqueline Smith, Emi Suzuki, Ravenna Neville, Benton Lewis, Jeffrey Osterman, Marc Silberberg, Amy Rubin, Annemargaret Connolly, Randi Singer, Matthew Morton, Vadim Brusser, Mary Lentowski, Eric Remijan, Michael Rivkin, Jennifer Britz, Olivia Greer, Jonathan Gartner and Samantha Caesar of Weil, Gotshal & Manges LLP acted as legal advisors to MORSCO and Advent International Corporation. Mike Saslaw, David D’Alessandro and Martin Luff of Vinson & Elkins acted as legal advisor to MORSCO senior management. Reece Limited (ASX:REH) completed the acquisition of MORSCO Inc. from Advent International Corporation and other co-owners on July 2, 2018.