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Gorman-Rupp's Patterson Pump Intends to Buy Morrison
Machinery company, Gorman-Rupp Co. (GRC - Free Report) recently announced that its subsidiary, Patterson Pump Company has communicated its intention to acquire Florida-based Morrison Pump Company through a letter of intent. The financial terms of the proposed acquisition were undisclosed.
As revealed, Morrison Pump Company is recognised as a manufacturer of large capacity pumping stations. It also provides related-services mainly for flood control and water management programs of municipalities. The firms cater to markets in the Americas, the Middle East and Asia.
Gorman-Rupp anticipates that the acquired assets will be integrated with Patterson Pump Company and subsequently compliment its business of manufacturing large-scale flood control, wastewater management and fire suppression pumps and pump systems. Also, Morrison is likely to generate roughly $7 million in revenues in 2016.
We believe such inorganic ways of strengthening its business, supported by a solid balance sheet will allow Gorman-Rupp to offer better and innovative products to customers in various operating regions. Also, the company anticipates benefitting from its cost-savings strategies and efforts to improve operational efficiency.
Gorman-Rupp’s financial performance in three of last four quarters has been impressive, with an average positive earnings surprise of 10.08%. Last quarter, Gorman-Rupp’s earnings of 25 cents per share exceeded the Zacks Consensus Estimate of 22 cents by 13.6%. Currently, the Zacks Consensus Estimate for the stock is at 95 cents per share for 2016 and $1.05 for 2017.
GORMAN RUPP CO Price and Consensus
GORMAN RUPP CO Price and Consensus | GORMAN RUPP CO Quote
Zacks Rank & Other Stocks to Consider
With a market capitalization of $716.5 million, Gorman-Rupp presently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the industry include DXP Enterprises, Inc. (DXPE - Free Report) , Tennant Company (TNC - Free Report) and Illinois Tool Works Inc. (ITW - Free Report) . While both DXP Enterprises and Tennant Company sport a Zacks Rank #1 (Strong Buy), Illinois Tool Works carries the same Zacks Rank as Gorman-Rupp.
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