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Universal Forest to Buy North American Container Assets
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Universal Forest Products, Inc. (UFPI - Free Report) yesterday announced that one of its subsidiaries will acquire majority assets of Marietta, GA-based North American Container Corporation. Financial consideration of the buyout has not been disclosed.
North American Container Corporation specializes in making structural packaging products — including wood/corrugated, laminated bulk boxes, wood replacement, recyclable and reusable packaging products. Its nine production facilities in Wisconsin, South Carolina, Tennessee and Georgia enable it to cater to customers’ demand effectively. Founded in 1967, its revenues in 2017 totaled $71 million.
Details of Buyout
As noted, the addition of North American Container’s assets will strengthen Universal Forest’s product portfolio and customer base by bringing corrugated, steel and hardwood packaging solutions under one roof. Also, the buyout will enable the company to leverage benefits by penetrating into growth markets as well as enhance its technological expertise.
North American Container will be integrated with Universal Forest’s Industrial segment. In 2017, the company generated roughly 33.3% of its gross sales (summation of segmental sales) from this segment. On a year-over-year basis, the segment’s sales grew 35% in 2017.
The buyout will be completed by Jun 1, 2018.
Universal Forest’s Inorganic Initiatives: A Boon
The above-mentioned transaction is consistent with Universal Forest’s policy of acquiring meaningful businesses to gain access to new customers, regions and product lines. In this regard, acquisitions of certain assets of Quality Hardwood Sales, LLC as well as buyouts of Robbins Manufacturing Company and Go Boy Pallets, LLC in 2017 are worth mentioning. The acquired assets of Quality Hardwood Sales and Robbins Manufacturing have strengthened the company’s position in the hardwood products market while Go Boy Pallets acquisition has helped it expand in the industrial packaging industry.
In addition, the idX buyout, completed in 2016, is projected to generate $290 million in revenues while saving on costs in 2018.
Universal Forest also believes in disposing of non-core assets. In January 2018, it sold its Medley, FL-based property in a bid to improve its operational efficiency and optimize the use of its resources.
Zacks Rank & Key Picks
With a market capitalization of nearly $2 billion, Universal Forest currently carries a Zacks Rank #2 (Buy). Earnings estimates for the stock for 2018 were increased by one brokerage firm in the last 60 days. It is pegged at $2.35, reflecting growth of 7.3% from the 60-day-ago tally.
Universal Forest Products, Inc. Price and Consensus
In the last 60 days, earnings estimates for each of these stocks improved for the current year. Also, average positive earnings surprise for the last four quarters was 5.18% for Louisiana-Pacific, 36.91% for Potlatch and 52.92% for Boise Cascade.
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Universal Forest to Buy North American Container Assets
Universal Forest Products, Inc. (UFPI - Free Report) yesterday announced that one of its subsidiaries will acquire majority assets of Marietta, GA-based North American Container Corporation. Financial consideration of the buyout has not been disclosed.
North American Container Corporation specializes in making structural packaging products — including wood/corrugated, laminated bulk boxes, wood replacement, recyclable and reusable packaging products. Its nine production facilities in Wisconsin, South Carolina, Tennessee and Georgia enable it to cater to customers’ demand effectively. Founded in 1967, its revenues in 2017 totaled $71 million.
Details of Buyout
As noted, the addition of North American Container’s assets will strengthen Universal Forest’s product portfolio and customer base by bringing corrugated, steel and hardwood packaging solutions under one roof. Also, the buyout will enable the company to leverage benefits by penetrating into growth markets as well as enhance its technological expertise.
North American Container will be integrated with Universal Forest’s Industrial segment. In 2017, the company generated roughly 33.3% of its gross sales (summation of segmental sales) from this segment. On a year-over-year basis, the segment’s sales grew 35% in 2017.
The buyout will be completed by Jun 1, 2018.
Universal Forest’s Inorganic Initiatives: A Boon
The above-mentioned transaction is consistent with Universal Forest’s policy of acquiring meaningful businesses to gain access to new customers, regions and product lines. In this regard, acquisitions of certain assets of Quality Hardwood Sales, LLC as well as buyouts of Robbins Manufacturing Company and Go Boy Pallets, LLC in 2017 are worth mentioning. The acquired assets of Quality Hardwood Sales and Robbins Manufacturing have strengthened the company’s position in the hardwood products market while Go Boy Pallets acquisition has helped it expand in the industrial packaging industry.
In addition, the idX buyout, completed in 2016, is projected to generate $290 million in revenues while saving on costs in 2018.
Universal Forest also believes in disposing of non-core assets. In January 2018, it sold its Medley, FL-based property in a bid to improve its operational efficiency and optimize the use of its resources.
Zacks Rank & Key Picks
With a market capitalization of nearly $2 billion, Universal Forest currently carries a Zacks Rank #2 (Buy). Earnings estimates for the stock for 2018 were increased by one brokerage firm in the last 60 days. It is pegged at $2.35, reflecting growth of 7.3% from the 60-day-ago tally.
Universal Forest Products, Inc. Price and Consensus
Universal Forest Products, Inc. Price and Consensus | Universal Forest Products, Inc. Quote
However, in the last month, the company’s shares declined 1.7% return, underperforming 3.3% gain recorded by the industry.
Some key players in the industry, sporting a Zacks Rank #1 (Strong Buy), are Louisiana-Pacific Corporation (LPX - Free Report) , Potlatch Corporation (PCH - Free Report) and Boise Cascade, L.L.C. (BCC - Free Report) . You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last 60 days, earnings estimates for each of these stocks improved for the current year. Also, average positive earnings surprise for the last four quarters was 5.18% for Louisiana-Pacific, 36.91% for Potlatch and 52.92% for Boise Cascade.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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