What Happened?

Shares of water management company Advanced Drainage Systems (NYSE: WMS) jumped 2.4% in the morning session after it agreed to acquire National Diversified Sales (NDS), the water management business of Norma Group SE, for approximately $1 billion in cash. 

The deal, valued at about $875 million after adjusting for expected tax benefits, brought together two firms with complementary water management solutions. The move expanded Advanced Drainage's product portfolio by adding NDS's expertise in residential water management, irrigation, and access boxes. 

This acquisition was expected to immediately add to the company's adjusted earnings per share in the first year. Management also projected that the combination would unlock over $25 million in yearly cost savings within three years. NDS generated $313 million in sales over the twelve months ended in June 2025, strengthening ADS's position as a full-scale provider of water management solutions.

After the initial pop the shares cooled down to $146.44, up 1.9% from previous close.

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What Is The Market Telling Us

Advanced Drainage’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 14 days ago when the stock dropped 10% after it was announced that Darin Harvey, the company's Executive Vice President of Supply Chain, was leaving the company. 

Harvey has been appointed as the new Senior Vice President of Operations and Supply Chain at Mueller Water Products, a leading manufacturer in the water management industry. With over 25 years of experience, Harvey's departure represents a significant leadership change for Advanced Drainage. The loss of a key executive responsible for a critical area like the supply chain can create uncertainty among investors about a company's operational stability and strategic direction, which likely contributed to the negative market reaction.

Advanced Drainage is up 28.1% since the beginning of the year, but at $146.44 per share, it is still trading 10.4% below its 52-week high of $163.52 from November 2024. Investors who bought $1,000 worth of Advanced Drainage’s shares 5 years ago would now be looking at an investment worth $2,527.

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