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Middleby's (MIDD) Wild Goose Buyout to Boost Beverages Portfolio

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The Middleby Corporation (MIDD - Free Report) recently announced that it has completed the acquisition of Wild Goose Filling. However, the financial terms of the transactions were kept under wraps.

Notably Middleby’s shares gained 0.8% yesterday to eventually close the trading session at $138.34.

Based in Louisville, Co, Wild Goose is a leading designer and manufacturer of liquid filling systems for craft beverages. The company’s advanced patented beverage filling technology helps in maintaining the top level of quality for packaged beverages. Some of the company’s major brands are Wild Goose, Meheen and Inline Filling Systems, which together generates total annual revenues of $35 million.

Benefits of the Deal

Wild Goose is believed to be a strategic fit for Middleby. Notably, the buyout will create strong growth opportunities for Middleby in the canned beverages market. The inclusion of Wild Goose’s solid expertise in brewing, canning, and bottling craft beverages will enable Middleby’s Ss Brewtech and Deutsche brands to provide a comprehensive equipment solution to its craft beverage customers.

Other Inorganic Moves

The latest transaction is in sync with Middleby’s policy of acquiring businesses for expanding its market share, product offerings and customer base. For instance, the company’s acquisition of RAM Fry Dispensers (January 2020) has been strengthening its product offerings in the restaurant automation platform. Also, the buyout of Ss Brewtech (June 2019) has enhanced its position in the beverage equipment industry. In addition, in April 2019, the company acquired Cooking Solutions Group.

Notably, acquired assets boosted Middleby’s sales by 2.3% and 1.1% in the second and third quarters of 2020, respectively.

Zacks Rank, Price Performance and Estimate Revisions

Middleby, with approximately $7.7 billion market capitalization, currently carries a Zacks Rank #3 (Hold). The company is poised to gain from its efforts to broaden product portfolio, a healthy liquidity position, acquired assets and growth opportunities across its operating segments. However, its high debt levels and headwinds arising from its international operations might affect its performance.

The Zacks Consensus Estimate for the company’s earnings is pegged at $4.69 for 2020 and $5.83 for 2021, up 9.3% and 7.8% from the respective 60-day-ago figures.

The company’s shares have gained 47.9% compared with 15.8% growth recorded by the industry in the past three months.

Key Picks

Some better-ranked stocks from the same space are Altra Industrial Motion Corp. , Applied Industrial Technologies, Inc. (AIT - Free Report) and Dover Corporation (DOV - Free Report) . While Altra Industrial currently sports a Zacks Rank #1 (Strong Buy), Applied Industrial and Dover carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Altra Industrial delivered a positive earnings surprise of 50.07%, on average, in the trailing four quarters.

Applied Industrial delivered a positive earnings surprise of 14.68%, on average, in the trailing four quarters.

Dover delivered a positive earnings surprise of 18.10%, on average, in the trailing four quarters.

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