Pentair to use $2 billion of cash to do buybacks; leverage low at 1x

By Devika Patel

Knoxville, Tenn., May 21 – Pentair plc has “strong” cash flow and has amassed $2 billion of cash.

Since leverage is low at 1x, management intends to use this cash flow for share buybacks.

“We do have a strong history of cash flow,” president and chief executive officer John L. Stauch said at the Electrical Products Group Conference in Longboat Key, Fla., on Monday.

“I think our operations are relatively lean.

“They’re certainly not world-class yet, but they’ve made a lot of progress.

“We’re not working capital intensive, we’re not capital intensive, and we do draw up a lot of cash flow,” Stauch said.

The company has accumulated $2 billion of cash flow and its leverage is low at 1x, so management expects to use this free cash flow to buy back shares.

“We’re looking at over $2 billion of cumulative free cash flow,” Stauch said.

“Yes, we know we need to do something with it.

“We’re going to end 2018 at our current forecast of less than 1x leverage.

“I do think that maintaining an investment-grade rating is important.

“I think you should assume that this $2 billion of cash goes into buybacks,” he said.

Pentair is a Minneapolis-based company mostly providing equipment related to water.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.