Metal processor Worthington Industries, Inc.’s Pressure Cylinders division has bought steel and fiberglass tanks maker Palmer Mfg. & Tank, Inc. The acquisition will boost Worthington’s foothold in the oil and gas industry.
Garden City, Kan.-based privately-owned Palmer makes steel and fiberglass tanks and processing equipment for the oil and gas industry. It also offers custom manufactured fiberglass tanks for agricultural, chemical and general industrial uses.
Palmer, which has annual sales of $70 million, has 184,000 square feet of manufacturing space at its Garden City headquarters. It is strategically located to cater the Bakken formation in N. Dak., the Uinta and Denver-Julesburg basins as well as several of the shale formations in northern Texas.
Worthington remains committed to expand its capabilities in the energy market. It continues to explore additional opportunities for growth both organically and through new businesses. The Palmer acquisition, which is in sync with this strategy, reinforces Worthington’s position in the energy space and provides opportunity to expand geographically in the oil and gas industry. The addition of Palmer’s capabilities is expected to drive growth in the pressure cylinders business and deliver meaningful commercial synergies.
Worthington, which has annual sales of $2.5 billion, is engaged in processing steel for application in the automotive, construction, hardware, agricultural, aerospace and other industries. The company makes a range of processed steel items, pressure cylinders (including oxygen and helium tanks and hand torches), metal framing products, racks, shipping pallets, airbrake tanks and consumer products.
Worthington, in Mar 2013, posted mixed third-quarter fiscal 2013 (ended Feb 28, 2013) results. Earnings of 52 cents a share beat the Zacks Consensus Estimate by 3 cents. Profit jumped 43% year over year, aided by healthy results from the pressure cylinders business. Sales inched up 1% year over year to $619.5 million but missed the Zacks Consensus Estimate of $677 million.
Worthington achieved, last month, the “Partner-Level Supplier” recognition for 2012 in the John Deere achieving excellence program. It is the highest supplier rating of Deere & Company .
Worthington currently retains a Zacks Rank #2 (Buy).
Other metal processors worth considering are NSK Ltd. and Kaydon Corporation . While NSK holds a Zacks Rank #1 (Strong Buy), Kaydon retains a Zacks Rank #2 (Buy).