On May 5, 2025, Pentair plc, a leading global water treatment company, announced the execution of a second amended and restated credit agreement establishing a senior unsecured revolving credit facility totaling $900 million. This significant financial arrangement is set for a five-year term, maturing on May 5, 2030, and reflects Pentair’s proactive efforts to optimize its liquidity and financial flexibility amid ongoing economic uncertainties.
Pentair Finance S.à r.l. and Pentair, Inc., subsidiaries of Pentair, are the borrowers under the agreement, with Pentair plc acting as guarantor. The credit facility allows Pentair to borrow up to \(900 million with an option to increase the facility or add term loans up to an additional \)450 million, subject to customary conditions and lender participation. This amendment supersedes the prior agreement dated December 16, 2021, and an amendment from December 23, 2022.
Interest Rate: The facility bears interest based on an adjusted base rate, Term SOFR (Secured Overnight Financing Rate), EURIBOR, or ESTR for euro swingline loans, plus an applicable margin determined by Pentair’s leverage or credit rating.
Facility Fees: A quarterly fee is applicable on the average daily unused portion of the credit line.
Prepayments: Voluntary prepayments are allowed without penalties.
Financial Covenants: Pentair must maintain a consolidated debt to EBITDA ratio not exceeding 3.75 to 1, or alternatively 4.25 to 1 for limited periods following material acquisitions, and an EBITDA to cash interest expense ratio of at least 3.00 to 1.
Revenue: $4.08 billion
Net Income: $625.4 million
Long-Term Debt: $1.6387 billion
Short-Term Debt: $9.3 million
Cash and Cash Equivalents: $118.7 million
The facility was utilized at $186.4 million at closing, enabling the company to manage its debt portfolio more effectively while maintaining strong liquidity for operational needs and potential growth initiatives.
Pentair’s strategic refinancing comes at a time when the company has successfully expanded its EBITDA to over $1 billion, with robust free cash flow enabling continued debt reduction. The current leverage ratio stands favorably at approximately 1.4 times EBITDA, significantly improved from 2.7-2.8 times during acquisition activities in 2022.
This credit facility renewal and augmentation bolster Pentair’s balance sheet flexibility allowing it to continue its transformation initiatives aimed at operational efficiency and margin expansion. The company targets a return on sales (ROS) of approximately 23% by the end of fiscal year 2025, building on a 20.8% ROS achieved in 2023. Transformation savings have accelerated to \(100 million in 2024, surpassing the initial \)75 million guidance.
Pentair emphasized the ongoing benefits of transformation initiatives involving sourcing optimization and operational excellence across all segments, including Flow, Water Solutions, and Pool. Pricing strategies, innovation in residential water treatment addressing emerging contaminants like PFOS, and the successful integration of Manitowoc Ice have been cornerstones of recent growth.
Management also highlighted macroeconomic factors such as interest rate environments impacting residential flow markets and new pool construction, noting a typical lag of 6 to 9 months before interest rate cuts materially affect demand. The enhanced credit facility positions the company to navigate these uncertainties while pursuing strategic capital allocation including share repurchases and bolt-on acquisitions.
Pentair’s \(900 million senior unsecured revolving credit facility, with an option to expand by \)450 million, significantly enhances its financial agility. Supported by a solid earnings base and improving leverage ratios, the company is well-positioned to execute on its transformation agenda while managing liquidity prudently amid economic fluctuations.