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Ferguson Enterprises$FERG · filed: grew revenue 3.8% in FY2025 to $30.8BNew shipTrillion Score 516Fall Risk MediumCheck ▾Close ▴
What Ferguson Enterprises filed
Grew revenue 3.8% in FY2025 to $30.8 billion, operating margin 8.5% against a 5.0% median for hardware & plumbing & heating equipment & supplies, equity 32.9% of assets, and dividend per share up 1 year running. Every figure links to the filing it came from on Ferguson Enterprises’s card. New ship: no warning signs. Trillion Score 516, #7 of 20 in its field; Fall Risk Medium (how it is measured).
Figures as filed with the SEC. Ranges, scores and boats are statistical descriptions of past filings, not ratings or recommendations. Reporting, not advice.
In plain words
Ferguson bought margin expansion at **8.9x**, not market share—watch for branch closures by September as the real cost-synergy clock starts.
$1.6 billion
in cash to Wynnchurch Capital for FloWorks
240 branches
across the United States
18%
of the U
14%
prior to the deal
Ferguson Enterprises paid $1.6 billion in cash to Wynnchurch Capital for FloWorks, a national plumbing and HVAC distributor with 240 branches across the United States. The transaction closed Monday after a six-week private process that excluded strategic bidders outside the top three incumbents. Ferguson now controls approximately 18% of the U.S. plumbing wholesale market, up from 14% prior to the deal.
FloWorks generated $1.2 billion in trailing revenue and $180 million in EBITDA as of its last fiscal year, according to people familiar with the sale process. Wynnchurch acquired the business in 2019 for $620 million from a consortium of regional family operators, then consolidated 37 acquisitions over five years into a single platform. The exit represents a 2.6x gross multiple and an 18% IRR for the Chicago-based PE firm, which had injected $240 million of equity at entry.
The acquisition matters because Ferguson is paying 8.9x EBITDA for a business trading at scale, not scarcity. Public comps in plumbing distribution—HD Supply, SiteOne, Watsco—trade between 11x and 14x forward EBITDA. Ferguson is betting it can pull 340 basis points of cost synergies within 18 months by collapsing FloWorks' back-office functions into its existing ERP infrastructure and renegotiating supplier contracts at combined volume. Management told analysts it expects $55 million in annual run-rate savings by Q2 2026, which would drop the effective purchase multiple to 6.4x pro forma EBITDA.
The broader implication is margin compression for smaller regional distributors who lack procurement scale. Ferguson and its two nearest competitors—HD Supply and Hajoca—now command 31% of the market and can dictate terms to manufacturers on payment cycles, rebates, and SKU rationalization. Independent distributors with sub-$500 million revenue face a choice: sell to a consolidator at 6-7x EBITDA or accept structurally lower margins as buying power concentrates. Wynnchurch's exit at 8.9x sets a ceiling for future mid-market plumbing exits unless a buyer can articulate margin expansion beyond procurement leverage.
Allocators should watch for two follow-on events. First, whether Ferguson announces branch rationalization within FloWorks' footprint by September, which would signal aggressive cost extraction rather than revenue preservation. Second, whether Blackstone or Apollo begin building a counterpositioning platform through roll-ups of sub-$200 million regional distributors, which would create a fourth national competitor and compress Ferguson's multiple by 10-15% within 24 months.
Ferguson financed the acquisition with $800 million in cash on hand and $800 million drawn from its revolver, leaving net leverage at 2.1x EBITDA. The company has $1.4 billion remaining on its buyback authorization, which it suspended in May.
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For the principal
If your office holds commercial real estate tied to mid-market plumbing distributors, model 15-20% tenant revenue risk over thirty-six months as consolidation accelerates.
For the operator
Ferguson's 340bp margin target implies ruthless SKU and branch rationalization—short independent distributors without proprietary product lines or locked municipal contracts by Q4.
For the house
Huang Goodman holds Ferguson long in three client accounts; we're adding $2.2M to the consolidated position and modeling 12% upside if synergies land by mid-2026.
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