Ingersoll Rand Inc. (IR Quick QuoteIR - Free Report) yesterday announced that it agreed to acquire Springfield, MO-based Tuthill Vacuum and Blower Systems. The transaction value has been fixed at $184 million in cash.

This is the company’s second buyout in the past few months, and is anticipated to be a strategic fit for its existing businesses.

Tuthill Vacuum and Blower Systems, business under Tuthill Corporation, specializes in manufacturing vacuum boosters, positive displacement blowers, engineered systems and mechanical vacuum pumps. These products are used mainly in energy and power, automotive, packaging, aviation, pharmaceutical, chemical, food and beverage, construction, water and wastewater, and plastics markets.

Its annual revenues are $60 million and employee strength is 160.

Inside the Headlines

As noted, the addition of Tuthill Vacuum and Blower Systems to Ingersoll’s portfolio will strengthen the latter’s existing vacuum and blowers product offerings, and enhance its technical capabilities. Further, Tuthill Vacuum and Blower Systems’ presence in multiple end markets, especially those in the Americas, and its employee base will likely prove to be a boon for Ingersoll.

The acquired assets, upon completion, will form part of Ingersoll’s Industrial Technologies and Services (IT&S) segment. The segment manufactures products like couplers, air compressors, power tools, blowers and vacuum pumps. Its revenues of $902.6 million represented 67.6% of the company’s total revenues in the third quarter of 2020.

Ingersoll anticipates the buyout to boost its adjusted earnings before interest, tax, depreciation and amortization, and adjusted earnings per share in the first year of completion.

Upon the receipt of consents from third-parties and regulatory approvals, Ingersoll anticipates completing the buyout on or before the first quarter of 2021.

Ingersoll’s Buyout Activities

The company believes in the expansion of product line, strengthening footholds in existing and new markets, and expanding customer base through acquisitions. In the third quarter of 2020, acquisitions had a positive impact of 0.3% on the company’s sales.

In September 2020, Ingersoll acquired Albin Pump — a manufacturer of electric peristaltic pumps for customers in the mining, chemical processing, food and beverage, industrial water, and municipal water markets. The buyout was added to the company’s Precision & Science Technologies segment.

Zacks Rank, Price Performance and Estimate Trend

With a market capitalization of $18.9 billion, Ingersoll currently carries a Zacks Rank #3 (Hold). Diversified business structure, solid product offerings, zeal to innovate and synergistic gains from acquired assets are likely to aid the company in the quarters ahead. However, the pandemic-related uncertainties, issues with international exposure and high costs might be concerning.

In the past three months, the company’s stock has rallied 25.1% compared with the industry’s growth of 14.9%.

The Zacks Consensus Estimate for Ingersoll’s earnings is pegged at $1.40 for 2020 and $1.76 for 2021, reflecting growth of 12% and 8.6% from the 60-day-ago figures. Also, the estimate for fourth-quarter 2020 earnings at 44 cents reflects growth of 12.8% from the 60-day-ago figure of 39 cents.