Lennox International's Acquisition Strengthens Market Position and Boosts Earnings

Lennox International's acquisition of NSI Industries' HVAC assets is expected to enhance revenue by $225 million and EBITDA by $55 million, contributing approximately $0.35 to earnings per share by 2026. Analyst Ryan Merkel views this as a strategic move that aligns with Lennox's goals to bolster its distribution service levels and improve margins. The acquisition is considered fair given the established nature of the brands and their potential to accelerate growth in the parts and supplies sector.

Lennox International, Inc. (LII), a leading provider of energy-efficient climate control solutions, has announced a significant acquisition that aims to bolster its parts and supplies business. The company will purchase the HVAC division of NSI Industries from Sentinel Capital Partners for approximately $550 million [1]. The acquisition is expected to close in the fourth quarter of 2025, subject to regulatory approvals [2].

The HVAC division of NSI Industries includes several established brands, such as Duro Dyne and Supco, which are known for their high-quality HVAC components and accessories. This acquisition will enhance Lennox's ability to deliver a comprehensive, integrated portfolio of parts and supplies, supported by enhanced digital and distribution capabilities across North America [3].

Alok Maskara, Chief Executive Officer of Lennox, stated that the acquisition will strengthen Lennox's position as a one-stop partner for the HVAC industry. The deal is expected to contribute approximately $225 million to revenue and $55 million to EBITDA by 2026, translating to an approximate $0.35 increase in earnings per share [4]. Analyst Ryan Merkel views this acquisition as a strategic move that aligns with Lennox's goals to improve distribution service levels and margins.

The acquisition aligns with Lennox's long-term strategy of expanding its product offerings and strengthening its market position. Lennox has a strong track record of innovation and has been in the HVAC industry for over 130 years. The addition of Duro Dyne and Supco's product portfolios will complement Lennox's existing residential and commercial HVAC products, further enhancing its customer offerings [2].

John MacQuarrie, NSI Industries HVAC President, expressed excitement about the acquisition, stating that the resources Lennox brings will help NSI Industries ensure its legacy of success continues. The acquisition is expected to provide Lennox with a broader parts and supplies offering, responding to customer requests for a more extensive portfolio [3].

This acquisition is considered fair given the established nature of the brands and their potential to accelerate growth in the parts and supplies sector. Lennox's recent impressive second-quarter earnings for 2025, which exceeded analyst expectations, further underscore the company's strong financial health and strategic positioning [2].

References
[1] https://www.morningstar.com/company-reports/1322031-lennox-acquisition-of-nsi-industries-hvac-division-will-bolster-parts-and-supplies-business?listing=0P0000039O
[2] https://www.investing.com/news/company-news/lennox-to-acquire-nsi-industries-hvac-division-for-550-million-93CH-4197614
[3] https://www.marketscreener.com/news/lennox-signs-agreement-to-acquire-hvac-division-of-nsi-industries-ce7c51dfd08dff21
[4] https://www.nasdaq.com/articles/lennox-intl-buy-hvac-division-nsi-industries-sentinel-capital-about-550-mln