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Clayton, Dubilier & Rice acquires HD Supplys’ Waterworks business

Clayton, Dubilier & Rice (CD&R) is to acquire HD Supply Holding’s Waterworks business unit (Waterworks), a distributor of water, sewer, storm and fire protection products, for USD2.5 billion.

Through a carve-out transaction, Waterworks will become an independent company, wholly-owned by CD&R funds.
 
Waterworks is a leading US distributor of industrial and construction products used to build and maintain underground water, wastewater and drainage infrastructure networks. The company operates a national network of 244 branches in 46 states with a sales team of more than 1,700 sales representatives serving a diverse customer base of more than 37,000 municipalities, private water companies and professional contractors. Waterworks will continue to be headquartered in St Louis, Missouri.
 
Jim Berges, a CD&R Partner, will serve as Chairman of Waterworks. Mr Berges was Chairman of HD Supply from 2007 to 2015. CD&R invested in HD Supply in 2007 and exited the investment in 2014. Previously, Berges served as Vice Chairman and President of Emerson Electric Co.
 
Steve LeClair, who has served as the President of Waterworks since 2011, will become the chief executive officer. 
 
“This transaction is an important milestone in the strategic growth of Waterworks,” says LeClair. “The Waterworks team is very excited to reunite with CD&R to accelerate our growth and productivity initiatives.”
 
“Waterworks represents an attractive opportunity to invest in the leading distributor in the US waterworks market, which stands to benefit from tailwinds in construction activity and municipal infrastructure spending,” says CD&R Partner JL Zrebiec. “With strong national, regional and local positions and a reputation for customer service and reliability, the company is in a very favourable long-term position.”
 
“Through our prior investment in HD Supply, we have a great appreciation for the strength and quality of the Waterworks business and the exceptionally talented Waterworks management team,” says CD&R Partner Nate Sleeper. “We are very excited to work alongside them once again to continue to build on the company’s leading market position and pursue the many significant profitable growth opportunities available to it as a freestanding business.”

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