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Flow International Corporation has announced that it will soon merge with a middle-market private equity firm, American Industrial Partners (AIP) for a sum in excess of $200 million. The transaction is anticipated to close beginning of year 2014.

As per the agreement signed between the two parties involved, each outstanding common share of Flow International will be purchased for $4.05 in cash. The company has already received its board of directors’ approval while it still awaits approval from its shareholders and regulatory authorities.

Acquisition of Flow International by American Industrial Partners is anticipated to work in favor of both the companies. The former expects to maximize its shareholders return through this transaction.

American Industrial Partners is primarily engaged in investment to gain control over industrial businesses headquartered in North America. Investments are undertaken mainly for corporate divestitures, management buyouts, recapitalizations, and going-private transactions.

Reaction to the news failed to influence Flow International’s share price that stayed at $3.73 at the close of the trading session on Sep 25, 2013.

A short discussion on Flow International’s fiscal first quarter 2014 results has been given been below to provide a glimpse of the company’s financial performance.

The company reported loss per share of 2 cents as compared with earnings per share of 5 cents recorded in the year-ago quarter and the Zacks Consensus Estimate of 1 cent earnings per share. Revenue decreased 10.9% year over year and came in at $59.0 million. Standard System sales in the first quarter declined 27% year over year; Advanced System sales were up 100%; and Consumable Parts sales were down 4%.

Flow International is one of the leading manufacturers of industrial waterjet machines and has a $183 million market capitalization. This Zacks Rank #4 (Sell) company faces direct competition from Hardinge Inc. and Kennametal Inc. (KMT - Analyst Report). Another company to watch out for in the industry is Actuant Corporation (ATU - Analyst Report), that carries a Zacks Rank #2 (Buy).

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