Watsco Issues 338,176 Common Shares at Closing of $505M Granite Group Acquisition

Executive Summary

On October 14, 2026, Watsco, Inc. (NYSE: WSO, WSOB) filed Form 8-K/A (Amendment No. 1) to update its Item 3.02 disclosure regarding the unregistered sale of equity securities in connection with its acquisition of Granite Group Holdings LLC and BBH Granite Buyer, Inc.

The amendment clarifies the final number of common shares issued at closing, which took place on October 9, 2026.

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Transaction Details

• Acquisition Target: Granite Group Holdings LLC (a Northeast distributor of plumbing and HVAC products with ~$500 million in sales) and BBH Granite Buyer, Inc.
• Total Consideration: $505.0 million (subject to customary post-closing purchase price adjustments).
• Payment Structure:
  • 80% paid in cash (~$404.0 million)
  • 20% paid in common stock (~$101.0 million)
• Shares Issued: Exactly 338,176 Consideration Shares of Common Stock ($0.50 par value).
• Pricing Mechanism: Determined using the 10-day volume-weighted average price (VWAP) on the NYSE immediately preceding closing (~$298.66 per share implied).
• Registration Exemption: Issued pursuant to Section 4(a)(2) of the Securities Act of 1933 and Rule 506(b) of Regulation D, with all recipient securityholders represented as accredited investors.

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Market & Capital Structure Impact

• Dilution: Issuance of 338,176 shares represents modest equity dilution relative to Watsco's total share float, funded primarily through cash reserves/borrowings.
• Strategic Value: Enhances Watsco's distribution footprint across seven Northeastern states by integrating a high-volume distributor generating approximately $500 million in annual revenue.