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Astec (ASTE) Eyes Growth, To Acquire RexCon for $26 Million

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In line with its strategy to drive growth through acquisitions, Astec Industries, Inc. (ASTE - Free Report) announced the acquisition of substantially all of the assets and liabilities of RexCon LLC for $26 million.

Burlington, WI-based RexCon is one of the leading full-line concrete batch plant manufacturers in the United States. The company has a strong reputation for providing innovative technology and dependable quality products.

The RexCon buyout is a strategic fit for Astec. RexCon’s product line supports Astec’s Aggregate and Mining Group segment which provides innovative solutions for the material handling, mining, recycling, construction, and demolition industries.

In the second quarter, the company recorded improved orders in the segment, backed by the Highway Bill as well as robust international sales. Astec remains positive on the outlook for Aggregate and Mining Group. Notably, solid activity in hot mix asphalt equipment sales, water-well drilling equipment sales, bolt material handling systems, aggregate crushing and screening equipment sales will drive the segment’s results. Improvement in international quote activity also bodes well for the near term.

However, Astec’s shares have significantly underperformed the industry with respect to price performance in the past year as it remained affected by low oil prices, volatile steel prices, and tepid economic and political environment in Brazil. The stock has declined 11.4%, as against 42.2% growth registered by the industry.



Zacks Rank & Stocks to Consider

Currently, Astec has a Zacks Rank #3 (Hold).

Better-ranked stocks in the same sector include China National Materials Company Limited , KION GROUP AG (KIGRY - Free Report) and Komatsu Ltd. (KMTUY - Free Report) . All three stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

China National Materials has an expected long-term earnings growth rate of 20%.

KION GROUP has an expected long-term earnings growth rate of 7%.

Komatsu has an expected long-term earnings growth rate of 12.7%.

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