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Chart Industries Buys VRV, Boosts Energy & Chemicals Unit

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Chart Industries, Inc. (GTLS - Free Report) recently announced that it has completed the buyout of VRV S.r.l. and its subsidiaries. Notably, the deal will boost the company’s competency across the global energy, cryogenic and petrochemical industries.

VRV manufactures and designs state-of-the-art pressure-equipment products and owns automated purpose-built production facilities. The company provides services across the energy, cryogenic and petrochemical end markets.

Acquisition Rationale

The acquisition is likely to be conducive to Chart Industries’ Energy & Chemicals and Distribution & Storage businesses going forward. Also, the buyout will enable the company to expand its Energy & Chemicals business in the European market. Moreover, with the acquisition, the company will add VRV’s French, Indian and Italian production and commercial facilities. This will strengthen the company’s port access and manufacturing capability. The acquisition will also expand the existing repair and service offering provided by the company.

As a matter of fact, the VRV acquisition is likely to bolster Chart Industries’ revenues by $120 million in the first year of ownership completion. The buyout is also anticipated to be accretive to the company’s earnings per share performance and also likely to bring in significant cost synergies.

In the past six months, the Zacks Rank #3 (Hold) company’s shares have returned 5.4% against 2.1% decline recorded by the industry it belongs to.

Notable Developments

In sync with the VRV business-integration move, Chart Industries realigned its existing segmental structure. The company will be reporting its results under three segments — Distribution & Storage Western Hemisphere (the Americas), Energy & Chemicals and Distribution & Storage Eastern Hemisphere (Middle East, Europe, and Asia including China). Chart Industries intends to provide superior customer services and improve business transparency to shareholders on grounds of this strategic segmental reshuffling move.

Stocks to Consider

Some better-ranked stocks from the same space are Luxfer Holdings PLC (LXFR - Free Report) , Applied Industrial Technologies, Inc. (AIT - Free Report) and Graco Inc. (GGG - Free Report) . While Luxfer Holdings sports a Zacks Rank #1 (Strong Buy), Applied Industrial Technologies and Graco carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Luxfer Holdings surpassed estimates thrice in the trailing four quarters, the average positive earnings surprise being 24.27%.

Applied Industrial Technologies outpaced estimates in each of the preceding four quarters, the average earnings surprise being 11.67%.

Graco surpassed estimates twice in the trailing four quarters, the average positive earnings surprise being 4.05%.

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