Advanced Drainage Systems, Inc. (NYSE:WMS) shares are trading higher on Tuesday after the company announced it had signed a definitive agreement to purchase the water management unit of Norma Group SE, known as National Diversified Sales (NDS), for approximately $1 billion in cash.
When accounting for expected tax benefits, the net purchase price comes to about $875 million.
The deal, unanimously approved by both boards, positions Advanced Drainage Systems to broaden its footprint in stormwater, onsite wastewater and irrigation markets.
As of June 30, 2025, Advanced Drainage Systems had cash worth $638.27 million. The firm’s net long-term debt obligations were $1.25 billion at the end of the first quarter of fiscal 2026.
According to Benzinga Pro, WMS stock has lost over 6% in the past year. Investors can gain exposure to the stock via the Global X Clean Water ETF (NASDAQ:AQWA).
By adding NDS’s lineup of residential water management products and irrigation solutions, Advanced Drainage Systems aims to accelerate growth in its Allied Products division.
The acquisition also enhances Advanced Drainage Systems’ retail and distributor relationships as well as expands its e-commerce and direct-to-consumer channels.
Executives highlighted that the move diversifies Advanced Drainage Systems’ offerings and supports growth across multiple end markets.
NDS generated $313 million in revenue over the 12 months ending June 2025, with nearly 90% of sales in the U.S.
The purchase price, net of tax benefits, reflects about 10 times NDS’ adjusted EBITDA for the same period, including expected cost synergies. Advanced Drainage Systems projects the deal will add to adjusted EPS within the first year, supported by anticipated savings of more than $25 million annually, fully realized within three years.
“ADS continues to evolve from a pipe manufacturing company to an enterprise providing a wide range of stormwater and onsite wastewater solutions,” said CEO Scott Barbour.
He added that the transaction “marks another important milestone” and aligns with the company’s disciplined approach to acquisitions and capital allocation.
The acquisition provides the company with entry into the $1.5 billion landscape irrigation sector, while also boosting its exposure to the residential repair and remodel segment.
Both categories are seen as resilient areas with strong secular growth drivers.
Management noted the combination of Advanced Drainage Systems’ operational expertise with NDS’s established brand would strengthen the firm’s ability to capture these long-term opportunities.
Price Action: WMS shares are trading higher by 2.67% to $147.52 premarket at last check on Tuesday.
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