Watsco to Acquire Granite Group Holdings for $505 Million in Cash and Stock

Executive Summary

On September 17, 2026, Watsco, Inc. (NYSE: WSO, WSOB) filed a Current Report on Form 8-K under Item 3.02 (Unregistered Sales of Equity Securities) disclosing that on September 12, 2026, the company entered into a definitive merger agreement to acquire BBH Granite Buyer, Inc. and Granite Group Holdings LLC.

Transaction Structure and Consideration

• Total Purchase Price: $505.0 million aggregate consideration, subject to customary post-closing adjustments for cash, debt, working capital, and transaction expenses.
• Payment Mix:
  • 80% Cash: ~$404.0 million
  • 20% Stock: ~$101.0 million payable in Watsco Common Stock ($0.50 par value).
• Share Calculation: The number of Consideration Shares to be delivered at closing equals 20% of the Purchase Price divided by the 10-day volume-weighted average price (VWAP) of Watsco common stock on the NYSE immediately preceding the closing.
• Estimated Issuance: Based on the 10-day VWAP ending September 16, 2026, Watsco estimates issuing approximately 324,257 shares of common stock at closing.

Strategic Overview of Target

Granite Group Holdings LLC is a diversified wholesale distributor of plumbing, heating, and HVAC products operating across seven northeastern states, generating approximately $500 million in annual sales. The transaction significantly expands Watsco's presence and distribution footprint in the Northeast United States.

Securities Exemption and Closing Conditions

• Exemption: The common shares will be issued without registration under the Securities Act of 1933 pursuant to Section 4(a)(2) and Rule 506(b) of Regulation D. Sellers represented that all voting equityholders qualify as accredited investors under Rule 501(a).
• Conditions to Closing: Customary closing conditions, including accuracy of representations, covenants, and the expiration or early termination of the waiting period under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976.