(Reuters) -Advanced Drainage Systems (ADS) said on Tuesday that it will buy German automotive and industrial supplier Norma Group’s water management business in a deal valued at about $1 billion.
U.S.-based ADS said the transaction, which will be funded by cash on hand and existing credit line capacity, is expected to close in the first quarter of 2026.
Norma said in a separate statement that it expects a net cash inflow in a range of 620 million to 640 million euros ($731 million -$755 million) from the sale.
Norma will use 300 million euros of the proceeds to repay debt and set aside up to 70 million for potential acquisitions in the industry applications business, it said.
It plans to distribute the rest to shareholders.
Shares in Norma were up 3.7% in Frankfurt early trade after the announcement.
Due to the sale, Norma now expects sales from continuing operations to be in the range of 810 million to 830 million euros this year, compared with 1.1 billion to 1.2 billion previously.
The company also lowered its outlook for margin on adjusted earnings before interest and taxes from continuing operations to around 0% to around 1%, from a previous forecast of 6%-8%.
($1 = 0.8477 euros)
(Reporting by Ruchika Khanna in Bengaluru and Linda Pasquini in Gdansk; Editing by Miranda Murray)
