ADS Completes $530 Million Acquisition of StormTrap to Expand Stormwater Storage Solutions
Key Facts
Advanced Drainage Systems (ADS) said on November 12, 2026, that it had completed its acquisition of StormTrap Investments LLC from PSP Capital, expanding its stormwater storage solutions business. In a closing statement attached to an 8-K filing with the U.S. Securities and Exchange Commission, the company said the deal was completed after being announced in October. ADS valued the purchase price at about $530 million, or about $450 million after accounting for the present value of expected tax benefits, subject to certain adjustments. Closing the deal moves it from an announced agreement to a completed acquisition and adds a stormwater storage offering to the company's portfolio. ADS said the addition complements its existing solutions and creates cross-selling opportunities.
ADS said the acquisition expands its addressable market with a complementary stormwater storage offering that fits its existing specification-driven marketing capabilities. The company added that the deal provides cross-selling opportunities, alongside growth opportunities supported by regulatory and market factors. These benefits position StormTrap within ADS's efforts to broaden the water solutions it offers customers. CEO Scott Barbour said the acquisition "positions us, with our disciplined approach to integration and capital allocation, to create long-term value." Barbour thus linked the commercial addition to the company's approach to executing integrations and allocating capital.
Figures ADS provided when it announced the agreement indicate that StormTrap generated about $165 million in revenue and about $40 million in adjusted EBITDA in the twelve months ended July 2026. The company estimated the deal's value multiple, net of tax benefits, at about 10 times adjusted EBITDA for the same period, including expected annual cost savings. These metrics set out the financial basis ADS presented for evaluating the deal, with revenue and earnings covering the twelve months through July. The company said when it announced the agreement that it would fund the purchase with available cash and existing borrowing capacity under its credit facility. The original announcement had forecast closing in the fourth quarter of 2026, subject to customary closing conditions and required regulatory approvals; the deal closed on November 12.
The closing follows ADS's results for the second fiscal quarter ended September 30, 2026, when sales rose 4.6% year over year to $889.4 million. In the same period, net income from continuing operations fell 14.6% to $133.6 million. Adjusted EBITDA also declined 0.2% to $286.8 million, compared with $287.5 million in the corresponding period of 2025. The results show sales growth alongside declines in net income and adjusted earnings for the quarter, while StormTrap adds its own revenue to ADS's business following completion of the deal. The company also reported that selling, general and administrative expenses increased $10.4 million, or 8.7%, to $129.6 million, attributing the increase mainly to operating and integration expenses related to the NDS acquisition.
ADS lowered its fiscal 2027 outlook to sales of between $3.3 billion and $3.4 billion and adjusted EBITDA of between $1 billion and $1.03 billion. In its report for the quarter ended September 30, the company noted that cost savings and benefits expected from the StormTrap acquisition might not be fully realized or achieved within the planned timeframe. The filing said: "We may not be able to achieve the planned synergies from the StormTrap acquisition or other expected benefits within the timeframe we anticipate, or at all." Completing the integration of StormTrap and realizing the expected benefits are among the key matters the company will monitor after closing the deal. In its closing disclosure, ADS clarified that its use of the word "segment" in the statement was in the business sense and did not mean StormTrap represented a reportable segment under ASC Topic 280.