ADS’s $1B NDS Merger Faces Regulatory Scrutiny

Acquisition to create full-service drainage platform as cities face climate and infrastructure pressures

23 Oct 2025

Advanced Drainage Systems has agreed to acquire National Diversified Sales in a transaction valued at about $1bn, or roughly $875mn after tax adjustments, marking one of the largest deals in the U.S. stormwater management sector.

The agreement, expected to close in the first quarter of 2026 pending regulatory approval, will combine ADS’s expertise in underground conveyance and treatment with NDS’s strength in surface and site-level systems. The companies said the integration would create a comprehensive platform for capturing, transporting, treating and reusing stormwater.

Analysts said the move reflects a growing focus on infrastructure resilience. “The integration of manufacturing, engineering and digital monitoring signals a stronger shift toward climate-resilient infrastructure,” said an analyst at WaterTech Insights. U.S. cities have faced increasing rainfall intensity, tighter runoff regulations and mounting costs to modernize outdated drainage networks.

NDS generates about $313mn in annual revenue and operates an extensive national distribution network that ADS plans to expand. The companies estimate annual cost synergies of at least $25mn within three years.

The transaction could reshape procurement for municipalities, developers and contractors, offering streamlined project delivery but potentially reducing supplier diversity. Smaller firms may seek opportunities in niche technologies or regional markets, while partners aligned with ADS’s platform could benefit from broader market access.

Kevin Hall, a sustainability consultant, called the deal “a catalyst for the next generation of stormwater innovation,” while noting that integration complexity “remains a challenge.”

The acquisition highlights a wider shift in infrastructure development from standalone drainage products to integrated, data-driven systems. If approved, the combination could set a precedent for how infrastructure companies scale technology-driven solutions to support climate-resilient urban design.