Oshkosh Corporation ( OSK Quick Quote OSK - Free Report) recently announced that the company has entered into an agreement to acquire Pratt Miller for a purchase price of $115 million. Per the terms of the cash-free, debt-free buyout, Pratt Miller will retain its name, staff, facilities and branding. Additional terms of the agreement have not been disclosed yet. The transaction, projected to complete in the first quarter of 2021, is subject to conventional closing conditions. Expected Synergy From the Buyout
Pratt Miller has robust expertise in advanced engineering, technology and innovation across the motorsport and multiple ground vehicle markets. The company has a firm footing in the U.S. robotic vehicle market, working with QinetiQ to develop and deliver prototypes of the U.S. Army’s Robotic Combat Vehicle-Light (RCV-L).
The Michigan-based company is said to have made remarkable progress in vital growth areas, such as artificial intelligence, robotics, autonomous and connected systems and electrification, pioneered by its world-class engineering and motorsports heritage. Oshkosh is a designer, manufacturer and seller of a varied range of vehicle bodies and specialty vehicles. The primary markets, which the company caters to, consist of defense, concrete placement, refuse hauling, access equipment, and fire and emergency. The buyout will help the Joint Light Tactical Vehicle (JLTV) maker to navigate to the untapped market of uncrewed ground vehicles (UGV) and establish a strong foothold there, enhancing its offerings. Moreover, the combination of Pratt Miller’s engineering specialty with Oshkosh’s innovation and operational efficiency will enable the latter to better serve customers and fuel its long-term growth. For Pratt Miller, Oshkosh is the perfect partner aiding it to apply the company’s motorsports heritage to face some of the most significant challenges, and collectively define the path to success. Together, the companies anticipate to extend their decade-long partnership and explore new business opportunities. The acquisition is a classic example of larger defense companies acquiring key technologies and new market entry to boost their product line-up. The latest buyout can be viewed as an investment in future business rather than being purely a financial acquisition. Moreover, the acquisition of a niche technology company like Pratt Miller has made Oshkosh the future of the UGV market. Zacks Rank & Stocks to Consider
Oshkosh currently carries a Zacks Rank of 4 (Sell). Shares of the company have depreciated 8.8%, year to date, while the
industry has appreciated 19.8%.
Some better-ranked stocks in the auto sector are
Lear Corporation ( LEA Quick Quote LEA - Free Report) , Autoliv Inc ( ALV Quick Quote ALV - Free Report) and Magna International ( MGA Quick Quote MGA - Free Report) , all of which sport a Zacks Rank of 1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here. These Stocks Are Poised to Soar Past the Pandemic
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