Gorman-Rupp Eyes Data Centers, Acquisitions as Debt Falls Below Key Threshold

Data centers and infrastructure are key growth drivers: Gorman-Rupp estimates data center-related applications account for about 10% of revenue, with additional opportunities in aging water systems, flood protection, international markets and new products.

Operating performance remains strong: 2025 EPS reached a record $2.14, while 2026 year-to-date sales rose nearly 6%, EPS increased 33% and adjusted EBITDA exceeded 20% of sales; backlog stood at $240 million.

Lower leverage is reviving acquisition plans: Debt reduction brought leverage to 1.9 times EBITDA, below the company's 2-times threshold, allowing management to resume evaluating complementary pump-industry acquisitions while maintaining dividends and business investment.

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Gorman-Rupp (NYSE:GRC) outlined its growth strategy, capital allocation priorities and exposure to infrastructure and data center demand at a company presentation, with management emphasizing continued organic expansion, potential acquisitions and ongoing debt reduction.

President and CEO Scott King said the pump manufacturer serves mission-critical, non-discretionary applications across a broad range of end markets, including water and wastewater, agriculture, construction, fuel transfer, HVAC, fire protection and industrial uses. The company believes its product and market diversity helps reduce cyclicality, as no individual market accounts for half of sales.

King also announced that Ronald Stoops, currently vice president of finance, will become chief financial officer effective Oct. 1, succeeding current CFO Jim Kerr, who will retire on that date.

Data centers, infrastructure cited as growth drivers

Management identified aging water and wastewater infrastructure, data center construction, international growth, new product development and market-share gains as major growth opportunities. King said Gorman-Rupp estimates that data center-related applications currently represent approximately 10% of revenue.

The company's pumps can be used at several stages of the data center lifecycle, including municipal water and wastewater systems, construction-equipment fueling, HVAC and chiller-water systems, fire protection, coolant distribution units and backup-generator fueling. King said that share of revenue has been growing and is expected to continue increasing gradually over time.