Pentair plc Announces $1.4B Credit Facility to Finance Taco Acquisition

What Happened

• Pentair plc announced that on September 1, 2026 it (via subsidiary Pentair Finance S.à r.l.) entered a credit agreement providing two senior unsecured term loan facilities totaling $1.4 billion to support the previously announced acquisition of Taco Group Holdings (purchase price $1.425 billion, announced July 27, 2026). As of September 1, 2026 no loans had been drawn; Pentair Finance intends to borrow the full $1.4 billion to fund part of the purchase price, pay related fees/expenses, and refinance Taco debt. The loans are guaranteed by Pentair and Pentair, Inc.

Key Details

• Total facilities: $400.0 million (Tranche 1) + $1.0 billion (Tranche 2) = $1.4 billion aggregate principal.
• Intended use: finance portion of Taco acquisition, fees/expenses, and refinance certain Taco indebtedness.
• Timing & conditions: availability is subject to closing of the Taco Acquisition (substantially concurrently with funding) and customary conditions including no material adverse effect on Taco since July 27, 2026, accuracy of reps/warranties, delivery of certificates and financial statements, and refinancing of certain Taco debt.
• Pricing & fees: interest at adjusted base rate or Term SOFR plus an applicable margin (margin tied to leverage or public rating); a ticking fee of 0.125% p.a. on undrawn commitments starts November 24, 2026.
• Maturities: Tranche 1 generally matures 18 months after the closing date of the acquisition; Tranche 2 matures May 5, 2030. Voluntary prepayments permitted without penalty; no mandatory prepayment.
• Financial covenants: consolidated net debt/EBITDA ≤ 3.75:1 (option to elect 4.25:1 temporarily under certain conditions) and EBITDA/cash interest expense ≥ 3.00:1. Agreement includes customary restrictions, events of default, and acceleration rights.

Why It Matters

• This financing shows how Pentair plans to fund the Taco acquisition without immediate cash drawdown; the committed $1.4B facility materially supports the deal structure and debt refinancing for Taco. Investors should note covenant limits (leverage and interest coverage), maturity profile (near-term Tranche 1 vs. 2030 Tranche 2), and the ticking fee that begins if the loans remain undrawn past November 24, 2026. These terms could affect Pentair’s leverage metrics and interest expense after the acquisition closes.