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Nordson's ACE Buyout to Boost Advanced Technology Sales

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Precision dispensing equipment manufacturer Nordson Corporation (NDSN - Free Report) recently announced that it has acquired Spokane, WA-based ACE Production Technologies, Inc. Financial terms of the transaction were kept under wraps.

Post the release of fourth-quarter fiscal 2016 (ended Oct 31, 2016) results on Dec 14, 2016, shares of Nordson Corporation yielded a positive 1.4% return, outperforming the negative return of 0.6% generated by the Zacks categorized Machinery General Industrial industry.

As revealed, ACE Production Technologies specializes in the designing and manufacturing of selective soldering systems. These products are widely used in automotive and industrial electronics assembly applications as well as are being accepted in the avionics, industrial automation and appliances end markets. The firm currently employs roughly 35 people.

The buyout does not include ACE Production’s lead tinning business, which will continue its operation under a new name, Component Tinning Services, Inc.

Nordson Corporation will integrate the acquired assets with its Advanced Technology Systems segment. The company anticipates that ACE Production’s product line will complement its existing conformal coating and optical inspection solutions. Also, it anticipates that ACE Production’s end markets will grow in the years to come in a mid-to-high single-digit range.

We believe the acquisition is consistent with Nordson’s expansionary policy. In fourth-quarter fiscal 2016, benefits from acquired assets added 1% to revenue growth. The company anticipates total sales to grow 4−8% year over year in first-quarter fiscal 2017, including organic growth of 6−10%. Earnings are expected within 74−84 cents per share.

Zacks Rank & Stocks to Consider

With a market capitalization of nearly $6.4 billion, Nordson Corporation currently carries a Zacks Rank #3 (Hold). Over the last 30 days, the Zacks Consensus Estimate on the stock increased 2.7% to $5.00 per share for fiscal 2017 and 1.9% to $5.39 per share for fiscal 2018.

Nordson Corporation Price and Consensus

 

Nordson Corporation Price and Consensus | Nordson Corporation Quote

Some better-ranked stocks in the machinery industry include Altra Industrial Motion Corporation , RBC Bearings Incorporated and Sun Hydraulics Corporation . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Altra Industrial Motion Corporation’s financial performance has been impressive, with an average positive earnings surprise of 8.06%, for the last four quarters. Also, earnings estimates for 2017 improved over the last 30 days.

RBC Bearings Incorporated’s financial performance has been impressive, with an average positive earnings surprise of 1.60%, for the last four quarters. Also, earnings estimates for fiscal 2017 remained stable while improved for fiscal 2018, over the last 30 days.

Sun Hydraulics Corporation’s earnings estimates for 2017 improved over the past 60 days.

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