Profile: Watts Water Technologies, Inc. (WTS)

Watts Water Technologies, Inc. (Watts), incorporated in 1985, is a supplier of products for use in the water quality, water safety, water flow control and water conservation markets. The Company operates its business in three geographic segments: North America, Europe and China. Watts distributes its products through three primary distribution channels: wholesale, do-it-yourself (DIY) and original equipment manufacturers (OEMs). Watts sells its products for the residential construction and home repair and remodeling industries through DIY plumbing retailers, national catalog distribution companies, hardware stores, building material outlets and retail home center chains, and through plumbing and heating wholesalers. In addition, it sells products directly to certain large OEMs and private-label accounts. During the year ended December 31, 2008, water quality products accounted for approximately 17% of its total sales. In May 2008, Watts completed the acquisition of Blucher Metal A/S.

Watts’ principal product lines include backflow preventers for preventing contamination of potable water caused by reverse flow within water supply lines and fire protection systems; a range of water pressure regulators for both commercial and residential applications; water supply and drainage products for commercial and residential applications; temperature and pressure relief valves for water heaters, boilers and associated systems; point-of-use water filtration and reverse osmosis systems for both commercial and residential applications, and thermostatic mixing valves for tempering water in commercial and residential applications. The Company’s products also include systems for under-floor radiant applications and hydraulic pump groups for gas boiler manufacturers and renewable energy applications, including solar and heat pump control packages; flexible stainless steel connectors for natural and liquid propane gas in commercial food service and residential applications, and large-diameter butterfly valves for use in China’s water infrastructure.

The Company’s products are sold to plumbing, heating and mechanical wholesale distributors, DIY chains and OEMs. Approximately 65% of its sales in 2008, were to wholesale distributors for both commercial and residential applications. Approximately 13% of its sales in 2008, were to DIY customers. Approximately 22% of its sales in 2008, were to OEMs. In North America, its OEM customers include water heater manufacturers, equipment manufacturers needing flow control devices and water systems manufacturers needing backflow preventers. Watts’ sales to OEMs in Europe are primarily to boiler manufacturers and radiant systems manufacturers. Its sales to OEMs in China are primarily to boiler and bath manufacturers, which include manufacturers of faucet and shower products.