Milwaukee-based Zurn Elkay Water Solutions announced that it has entered into an agreement to acquire Vernon Hills, Illinois-based Intellihot, a manufacturer of tankless water heaters.

Intellihot serves several commercial markets including health care, education, hospitality and commercial industries. Its net sales are expected to be approximately $37 million in 2026, according to filings with the U.S. Securities and Exchange Commission.

The deal is expected to close early in the third quarter this year.

Terms of the deal were not disclosed.

“We are excited about Intellihot, an earlier-stage technology disruptor in the tankless water heating market for commercial and institutional applications,” said Todd Adams, chairman and CEO of Zurn Elkay. “This transaction will be a strong initial step into an adjacent category where building owners demand integrated solutions from partners like Zurn Elkay and Intellihot that they know and trust. A combination with Intellihot, which we have cultivated for years, will further our long-term growth strategy and will bring an established presence in the water heating end market.

Adams remarked also that Zurn Elkay’s balance sheet, leverage, liquidity, cash flow generation, mergers and acquisitions and innovation funnels remain strong, “all of which put (the company) in a great spot as we continue to pursue opportunities for growth both organically and inorganically,” he said.