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Gibraltar (ROCK) Buys TerraSmart & Sunfig, Boosts Solar Portfolio
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Gibraltar Industries, Inc. (ROCK - Free Report) has expanded the solar energy portfolio with acquisitions of TerraSmart and Sunfig. The company bought TerraSmart for $220 million and Sunfig for $3.75 million in cash. The transactions are expected to be immediately accretive to earnings.
Shares of Gibraltar jumped more than 5% on Jan 4, following the news.
Buyout Synergies
TerraSmart is one of the leading providers of screw-based, ground-mount solar racking technology, particularly used for solar projects installed on challenging terrain. It has more than 10 years of experience in the design, engineering, and manufacturing of turnkey field solutions marketed under GLIDE (fixed-tilt) and TerraTrak (single-axis tracker) brand names. TerraSmart is expected to record 2020 revenues and adjusted EBITDA of $150-$155 million and $26-$28 million, respectively.
Meanwhile, Sunfig provides software solutions that optimize solar energy investments through upstream design, performance and financial modeling. It provides a web-based software solution — Sunfig Instant Feasibility Tool — that optimizes solar project design for maximum financial return in real time. It also offers APIs that integrate directly into existing software, tools, and processes.
These buyouts will position Gibraltar as the largest turnkey provider in the $14.3-billion domestic solar energy market. It will have a wide portfolio of ground-mount infrastructure, tracker and design software solutions, which will serve customers of any type and/or size on any terrain.
Gibraltar expects the solar energy business within the Renewable Energy and Conservation segment to exceed $700 million in organic revenues by 2025. The company expects to generate pro-forma fiscal 2020 revenues of $400 million.
Strong Renewable Market Prospects
The company remains encouraged by long-term market growth prospects of both Renewable Energy and Conservation businesses. Solar energy has become a cost-effective option for most part of the United States, despite the tariffs being levied on imported PV panels, which is worrisome for the industry.
In June 2020, the company launched a second-generation tracker solution, Sunflower, and acquired intellectual property that will support the solar canopy business. Strong demand from both domestic renewable energy and conservation markets, along with continued traction of innovative products are likely to fuel growth.
Meanwhile, Gibraltar has been benefiting from strategic initiatives that primarily focus on operational excellence, innovation, portfolio management and acquisitions. The company’s growth of the renewable portfolio has been partly attained through acquisitions.
Shares of Gibraltar have gained 50.8% in the past year, outperforming the industry’s 27.2% rally. Solid contribution from Thermo, Delta Separations and Apeks buyouts, as well as increased volume for both Renewable Energy and Conservation and Residential Products segments supported the growth. This Zacks Rank #3 (Hold) company’s 2021 earnings are expected to grow 10.9%.
Key Picks
Some better-ranked stocks in the same space include Construction Partners, Inc. (ROAD - Free Report) , Armstrong World Industries, Inc. (AWI - Free Report) and Installed Building Products, Inc. (IBP - Free Report) .
Zacks #2 (Buy) Ranked Armstrong World’s 2021 earnings are expected to rise 9.4%.
Installed Building Products — also a Zacks Rank #2 company — delivered a trailing four-quarter earnings surprise of 20.2%, on average.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Gibraltar (ROCK) Buys TerraSmart & Sunfig, Boosts Solar Portfolio
Gibraltar Industries, Inc. (ROCK - Free Report) has expanded the solar energy portfolio with acquisitions of TerraSmart and Sunfig. The company bought TerraSmart for $220 million and Sunfig for $3.75 million in cash. The transactions are expected to be immediately accretive to earnings.
Shares of Gibraltar jumped more than 5% on Jan 4, following the news.
Buyout Synergies
TerraSmart is one of the leading providers of screw-based, ground-mount solar racking technology, particularly used for solar projects installed on challenging terrain. It has more than 10 years of experience in the design, engineering, and manufacturing of turnkey field solutions marketed under GLIDE (fixed-tilt) and TerraTrak (single-axis tracker) brand names. TerraSmart is expected to record 2020 revenues and adjusted EBITDA of $150-$155 million and $26-$28 million, respectively.
Meanwhile, Sunfig provides software solutions that optimize solar energy investments through upstream design, performance and financial modeling. It provides a web-based software solution — Sunfig Instant Feasibility Tool — that optimizes solar project design for maximum financial return in real time. It also offers APIs that integrate directly into existing software, tools, and processes.
These buyouts will position Gibraltar as the largest turnkey provider in the $14.3-billion domestic solar energy market. It will have a wide portfolio of ground-mount infrastructure, tracker and design software solutions, which will serve customers of any type and/or size on any terrain.
Gibraltar expects the solar energy business within the Renewable Energy and Conservation segment to exceed $700 million in organic revenues by 2025. The company expects to generate pro-forma fiscal 2020 revenues of $400 million.
Strong Renewable Market Prospects
The company remains encouraged by long-term market growth prospects of both Renewable Energy and Conservation businesses. Solar energy has become a cost-effective option for most part of the United States, despite the tariffs being levied on imported PV panels, which is worrisome for the industry.
In June 2020, the company launched a second-generation tracker solution, Sunflower, and acquired intellectual property that will support the solar canopy business. Strong demand from both domestic renewable energy and conservation markets, along with continued traction of innovative products are likely to fuel growth.
Meanwhile, Gibraltar has been benefiting from strategic initiatives that primarily focus on operational excellence, innovation, portfolio management and acquisitions. The company’s growth of the renewable portfolio has been partly attained through acquisitions.
Shares of Gibraltar have gained 50.8% in the past year, outperforming the industry’s 27.2% rally. Solid contribution from Thermo, Delta Separations and Apeks buyouts, as well as increased volume for both Renewable Energy and Conservation and Residential Products segments supported the growth. This Zacks Rank #3 (Hold) company’s 2021 earnings are expected to grow 10.9%.
Key Picks
Some better-ranked stocks in the same space include Construction Partners, Inc. (ROAD - Free Report) , Armstrong World Industries, Inc. (AWI - Free Report) and Installed Building Products, Inc. (IBP - Free Report) .
Construction Partners, a Zacks Rank #1 (Strong Buy) stock, has an expected earnings growth rate of 16.7% for the current fiscal year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks #2 (Buy) Ranked Armstrong World’s 2021 earnings are expected to rise 9.4%.
Installed Building Products — also a Zacks Rank #2 company — delivered a trailing four-quarter earnings surprise of 20.2%, on average.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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