Watsco Finalizes $505 Million Acquisition of Granite Group Holdings

Key numbers

Deal value	$505M
Share of market cap	4.1%
Share of annual revenue	7.0%

Key highlights

• Total transaction value of $505 million paid at closing on October 9, 2026
• Consideration structured as 80% cash and 20% in WSO common stock
• Issued 338,176 shares based on 10-day volume-weighted average price
• Target company generates approximately $500 million in annual sales
• Acquisition adds distribution locations across seven states in the Northeast

What Is the Deal?

Watsco Inc. has completed its acquisition of Granite Group Holdings LLC, a major distributor of plumbing and HVAC products based in the Northeast. Under the terms of the merger agreement finalized on October 9, 2026, Watsco paid an aggregate consideration of $505 million. This price is subject to standard post-closing adjustments. The acquisition brings Granite Group, which generates approximately $500 million in annual sales across seven states, under Watsco ownership as a wholly owned subsidiary. This move represents a significant expansion of Watsco's service area into the northeastern United States, following the initial agreement reached in September 2026.

Deal Structure & Terms

• Aggregate consideration totaled $505 million at the time of closing
• Payment structure consisted of 80% cash and 20% common stock
• The stock portion resulted in the issuance of 338,176 unregistered common shares
• Share count was determined by the 10-day volume-weighted average price preceding the close
• All Granite Group securityholders were confirmed as accredited investors under Rule 501(a)

Strategic Rationale

The acquisition of Granite Group Holdings significantly enhances Watsco's geographic density in the Northeast, a region where the company has historically sought to expand its footprint. By acquiring a distributor with $500 million in existing sales, Watsco gains immediate scale in seven states. The addition of plumbing products complements Watsco core HVAC business, providing cross-selling opportunities across a wider contractor base. This strategy aligns with Watsco's long-term goal of consolidating the fragmented North American distribution market. The use of common stock for 20% of the deal value ensures alignment with the sellers while preserving cash for future expansion and quarterly dividend commitments.

Financial Context

The $505 million deal arrives as Watsco continues a period of aggressive expansion, following the acquisition of Jackson Supply Company earlier in 2026. With an annual revenue profile exceeding $7.2 billion and a market capitalization of approximately $12.18 billion, this transaction represents a significant capital allocation. The deal value is approximately 4.1% of Watsco's current market cap. The company recent financial performance includes a quarterly cash dividend of $3.30 per share declared in October. Watsco is scheduled to release its third-quarter 2026 earnings on October 27, which will provide further insight into the integration of recent regional acquisitions.

WATSCO INC · financial snapshot

Share price	$295.33
Market cap	$12.2B
Revenue (annual)	$7.2B
P/E (TTM)	25.3×
1-month price change	-5.22%
Sector	IndustrialsIndustrial Distribution

Reference market data from a third-party provider, as of the story. Not a valuation or a recommendation.