UPDATE 2-Australian plumbing company Reece to buy U.S. peer for $1.4 bln

* Deal will help Reece tap strong U.S. housing market

* Target company Morsco has presence in southern U.S. states

* Deal is Reece's first U.S. acquisition and its biggest

* Purchase through cash and debt (Adds analyst comment, background)

May 7 (Reuters) - Australian plumbing products supplier Reece Ltd said on Monday it would buy privately held Texas-based peer Morsco Inc for $1.44 billion including debt, in a push to gain access to the fast-growing markets of the southern United States.

This would be Reece's first U.S. acquisition and its biggest so far, a spokeswoman for the company told Reuters.

The Fort Worth-based Morsco will give Reece market exposure to the Sun Belt region, which includes southern states such as Florida, Louisiana, South Carolina and Texas.

"It's a market that's forecast to grow at twice the rate of the Australian market and it is currently about eight times the size," Reece Chief Executive Peter Wilson said in a statement.

The acquisition is a bet on the strength of the U.S. housing market sector, especially wealthy states such as Texas, despite some concerns rising interest rates could slow demand.

"(The deal is) also taking a view on housing construction market in the United States which does appear to be heading in a positive direction," said James McGlew, executive director for corporate stockbroking at Perth-based Argonaut.

"With interest rates now rising, it will be interesting to see how that impacts on the growth particularly in the domestic building market," he said.

Reece said the deal will be funded through a combination of cash and debt, adding that it will also raise A$560 million ($421.6 million) through a stock offering.

The Australian billionaire Wilson Family, which owns a majority stake in Reece and is backing the deal, will subscribe to A$300 million worth of shares in the offering.

A bulk of the funding, however, will come from an underwritten $1.14 billion secured credit facility.

However, the Reece spokeswoman declined to comment on the split in valuation between debt and cash.

Reece said it will operate Morsco separately from its Australian and New Zealand businesses, and retain the U.S. management.

Morsco was unavailable for comment outside U.S. working hours.

Reece also gave guidance for the fiscal year ending June 2018. It expects an after-tax profit of A$223-A$230 million, 5 percent higher than last year. It forecast sales of A$2.65 billion-A$2.70 billion.

Trading of Reece shares on the Australian Securities Exchange was halted and will be lifted on Wednesday after an announcement related to the share issue.

($1 = 1.3282 Australian dollars) (Additional reporting by Chris Thomas in Bengaluru; Editing by Sayantani Ghosh and Sam Holmes)