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Pump maker Pentair to buy Erico Global in $1.8 billion deal

Nelson Peltz at Delivering Alpha 2015 in New York.
David A. Grogan | CNBC
Nelson Peltz at Delivering Alpha 2015 in New York.

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.

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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.