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AZZ Closes Acme Galvanizing Buyout, Boosts Service Offerings

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AZZ Inc. (AZZ - Free Report) recently announced that it has completed the acquisition of assets of Acme Galvanizing, Inc. However, the financial terms of the transaction were kept under wraps.

AZZ’s shares declined 1.7% yesterday to eventually close the trading session at $46.65.

Based in Milwaukee, WI, Acme Galvanizing is a privately-held company, engaged in providing metal coating services to the post-fabrication steel market. Notably, the company has been operating for more than a century.

Acquisition Rationale

The latest buyout is in sync with AZZ’s focus on acquiring businesses for expanding its market share and customer base. The inclusion of Acme Galvanizing’s four fully automated zinc plating lines and a fully enclosed galvanizing kettle will enable AZZ to boost its metal coating services in the Midwest. With the addition of the new metal coatings plant in Milwaukee, AZZ will also increase its network of hot-dip galvanizing plants to forty sites in North America.

It’s worth mentioning that the buyout is anticipated to be accretive to AZZ’s earnings within the initial year of its operation.

Other Inorganic Moves

Another notable acquisition made by AZZ is Preferred Industries (September 2019). The buyout has enhanced the company’s offerings and expanded its network of surface technology plants. Also, the company’s buyout of NuZinc’s assets (August 2019) helped it in strengthening its capability and capacity in electroplating solutions.

Zacks Rank and Price Performance

AZZ, with approximately $1.2 billion market capitalization, currently carries a Zacks Rank #3 (Hold). Going forward, the company is set to benefit from its well-diversified business structure and large customer base in various industries. However, it has been experiencing coronavirus-induced challenges in various parts of its businesses.

In the past three months, the company’s share price has increased 31% compared with the industry’s growth of 19.2%.

Stocks to Consider

Some better-ranked stocks from the same space are II-VI Incorporated (IIVI - Free Report) , Rexnord Corporation (RXN - Free Report) and SPX FLOW, Inc. (FLOW - Free Report) . While II-VI currently sports a Zacks Rank #1 (Strong Buy), Rexnord and SPX FLOW carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

II-VI delivered a trailing four-quarter earnings surprise of 79.34%, on average.

Rexnord pulled off a trailing four-quarter earnings surprise of 20.62%, on average.

SPX FLOW delivered a trailing four-quarter earnings surprise of 146.55%, on average.

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