Pentair plc has entered into a new credit agreement to finance its pending acquisition of Taco Group Holdings. The agreement, dated September 1, 2026, was executed by Pentair Finance S.à r.l., Pentair plc, and Pentair, Inc.
The credit facility provides for two senior unsecured term loan facilities totaling $1.4 billion. The first tranche is a $400.0 million term loan facility, while the second tranche is a $1.0 billion term loan facility. As of the signing date, no loans were outstanding under these facilities. Pentair Finance intends to borrow the full $1.4 billion aggregate principal amount to finance a portion of the purchase price for the Taco Acquisition, pay related fees and expenses, and refinance certain outstanding indebtedness of Taco.
The availability of loans under the Term Loan Facilities is contingent upon the closing of the Taco Acquisition occurring substantially concurrently with the funding of the loans. The lenders' commitment to make the Term Loan Facilities available to Pentair Finance expires on December 31, 2026, or upon the earlier termination of the Purchase Agreement or the Taco Acquisition.
Under the terms of the agreement, Pentair Finance will begin paying a ticking fee of 0.125% per annum on the amount of each lender’s daily undrawn term loan commitments beginning November 24, 2026. The maturity dates for the term loans are set to occur 18 months after the closing date of the Taco Acquisition for the Tranche 1 facility and May 5, 2030, for the Tranche 2 facility.
The agreement includes financial covenants that limit Pentair’s leverage ratio and require a minimum EBITDA to cash interest expense ratio. Specifically, the ratio of consolidated debt to consolidated net income (EBITDA) must not exceed 3.75 to 1.00, or 4.25 to 1.00 for four testing periods in connection with certain acquisitions. The agreement also contains customary events of default, which may allow lenders to terminate commitments and declare amounts outstanding immediately due and payable.
