Pump and valve maker Pentairagreed to buy fastening products maker Erico Global for $1.8 billion in cash, including debt, weeks after activist investor Nelson Peltz asked the company to bulk up through deals.
Solon, Ohio-based Erico sells fixing and fastening products and couplers under brands such as Caddy and Lenton.
Peltz, Pentair's third-largest shareholder, reported a 7.2 percent stake in the company in June.
Pentair's shares rose 1.3 percent to $62.46 in premarket trading on Monday.
The deal is expected to add more than 40 cents per share to 2016 adjusted earnings, Pentair said.
Analysts on average were expecting 2016 earnings of $4.23 per share, according to Thomson Reuters I/B/E/S.
Goldman Sachs & Co is Pentair's financial adviser, while JP Morgan is advising Erico.
Foley & Lardner LLP is providing legal counsel to Pentair and Jones Day to Erico.
Up to Friday's close, Pentair's shares had fallen about 7 percent this year.