06:20 AM EDT, 09/23/2025 (MT Newswires) -- Advanced Drainage Systems ( WMS ) agreed to acquire the water management business of German machine joining components manufacturer Norma Group in an all-cash deal worth about $1 billion.

The transaction has a value of roughly $875 million when adjusted for the present value of expected tax benefits, Advanced Drainage Systems ( WMS ) said in an early Tuesday statement. Shares of the water management solutions provider were up 2.9% in the most recent premarket activity.

Advanced Drainage Systems ( WMS ) anticipates the proposed acquisition to expand its offerings in new segments and strengthen its go-to-market capabilities in retail and distributor channels. The deal is also expected to increase the firm's total addressable market by entering the $1.5 billion landscape irrigation segment.

Norma's water management business, known as National Diversified Sales, generated $313 million in revenue for the 12-month period ended June, with about 90% of sales in the US, according to Advanced Drainage Systems ( WMS ). The business has six plants in the US, Mexico, India, Malaysia and Italy, with a workforce of around 1,100 employees mainly in America and Asia, Norma said in a separate statement.

"The acquisition of (National Diversified Sales) marks another important milestone in ADS' journey as it accelerates our strategy to diversify and increase the mix of highly profitable allied and infiltrator products that enhance resiliency, supports profitable growth, and allows ADS to pursue water management projects across a broader set of applications," Advanced Drainage Systems ( WMS ) Chief Executive Scott Barbour said in the statement.

The transaction, which requires approval from regulators, is expected to complete in the first quarter of 2026. Advanced Drainage Systems ( WMS ) estimates the deal to be accretive to its adjusted earnings on a per-share basis in the first year, supported by its integration capabilities and operational discipline. The deal is also expected to generate more than $25 million in annual cost synergies within three years.

"Through our investment in NDS and applying ADS' proven operating model and integration expertise, we expect to drive enhanced profitability and realize significant synergies as a combined entity," according to Barbour. "We are confident this combination will increase our exposure to markets with powerful secular tailwinds."

The company aims to finance the acquisition with cash on hand and existing credit line capacity, it said.

"The water management business has developed very successfully over the past ten years under our ownership and delivered significant revenue and profitability growth," Norma CEO Mark Wilhelms said. "We are convinced that ADS represents a very good home for the business."