Watsco Expands Sunbelt Footprint with Strategic Acquisition of Jackson Supply
Miami, Tuesday, 28 April 2026.
Leveraging a debt-free balance sheet with $593 million in cash, Watsco is acquiring Jackson Supply, strategically adding $230 million in annual sales to dominate the growing Sunbelt market.
A Strategic Sunbelt Expansion
The definitive agreement to acquire Jackson Supply Company, announced on April 28, 2026, serves as a cornerstone of Watsco’s regional growth strategy [1]. The transaction, which is anticipated to close in the second quarter of 2026 pending customary closing conditions, will mark the 73rd independent distributor to join the Watsco network [1][3]. Watsco’s Chairman and CEO, Albert H. Nahmad, emphasized the strategic alignment, noting a relationship with Jackson Supply’s leadership spanning over 20 years and highlighting the target company’s 50-year legacy [1][4]. Following the acquisition, Jackson Supply will continue to operate under its existing management team [1][3].
Earnings Outperform Wall Street Expectations
The timing of the acquisition announcement coincided with a first-quarter financial performance that comfortably surpassed Wall Street estimates. For the quarter ending March 31, 2026, Watsco reported earnings per share (EPS) of $1.87 [1][5]. This figure bested the analyst consensus estimate of $1.70 by $0.17, representing an earnings beat of 10% [4][5]. Total revenues for the quarter reached $1.53 billion, which, while flat year-over-year, exceeded the consensus projection of $1.49 billion [4][5].
Navigating the A2L Transition and Tech Adoption
Watsco’s revenue resilience is particularly notable given the ongoing industry transition to A2L refrigerants, a shift that began in early 2025 and has impacted roughly 55% of the products sold across the company’s 650 locations [1]. This transition has altered the sales mix dynamics. While HVAC equipment unit volumes declined by 1% in the first quarter, the average selling price for these units increased by 9% [1][3]. This price appreciation was fueled by a higher mix of A2L-compliant and high-efficiency systems, helping to offset the lower unit volume [1][3].
Long-Term Shareholder Returns
Confidence in Watsco’s future cash flows and market position was further signaled by a generous capital return policy. In April 2026, the company’s Board of Directors approved a 10% increase to the annual cash dividend, raising it to $13.20 per share [1][4]. This hike continues an impressive streak, marking 52 consecutive years that Watsco has paid dividends to its shareholders [1][4].