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ESCO (ESE) on Buyout Spree, Adds Phenix & Altanova to Portfolio
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ESCO Technologies Inc. (ESE - Free Report) yesterday announced that it acquired Accident, MD-based Phenix Technologies, Inc. The financial terms of the transaction have been kept under wraps.
Concurrently, the company announced that it completed the buyout of Taino, Italy-based I.S.A Altanova Group S.R.L. on Jul 29, 2021. The deal was originally announced by ESCO on May 20. The financial terms of the buyout were also undisclosed.
Both acquisitions are predicted to boost ESCO’s growth opportunities in the utility and power markets. Yesterday, ESCO’s shares have gained 0.41%, ending the trading session at $94.07.
Inside the Headlines
Phenix Technologies is a leading manufacturer of portable and stationary test systems (high voltage/high power/high current) as well as related solutions and components. The products and solutions — including transformer, cable testing equipment and resonant — are used in field service organizations, electric industry and high-voltage test laboratories. Its customer base is spread across 110 countries.
Annually, Phenix Technologies generates revenues of $25 million and its operating margin is in the high teens.
The addition of Phenix Technologies to ESCO’s portfolio will strengthen the latter’s product offerings and customer base, technology and software application expertise, and engineering knowledge.
Then again, Altanova engages in providing monitoring systems and diagnostic products as well as services for electrical assets. Its products and services are mainly used in the process, power generation, renewable energy, transmission and distribution network industries. The company’s operations are spread in excess of 100 countries.
As noted, the Altanova acquisition is predicted to boost ESCO’s product offerings and geographical reach, especially in Asia and Europe. It will enable the company to leverage benefits from the growing power infrastructure market around the world. In calendar 2020, Altanova generated revenues of $30 million.
ESCO will integrate both acquired assets with its Utility Solutions Group (“USG”) segment.
The Utility Solutions Group’s business comprises operations of Doble Engineering Company and Morgan Schaffer Ltd. as well as NRG Systems, Inc. While Doble engages in making diagnostic testing solutions, NRG manufactures decision support tools to be used mainly in the renewable energy market. It generated revenues of $47.7 million in third-quarter fiscal 2021 (ended Jun 30, 2021). This accounted for 26.3% of the company’s third-quarter total revenues.
Acquiring businesses are effective ways for the company to gain access to new markets, expand its product line and enhance its customer base. Notably, it invested $6.7 million in making acquisitions (net of cash acquired) in the first three quarters of fiscal 2021 (ended June 2021).
Zacks Rank, Estimate Trend and Price Performance
With a $2.4-billion market capitalization, ESCO currently carries a Zacks Rank #3 (Hold). The company is well-positioned to benefit from its solid product offerings, exposure in diversified end markets, healthy liquidity position, cost-saving actions and buyouts. However, the persistence of softness in the commercial aerospace market is concerning.
In the past three months, the company’s shares have declined 9.1% against the industry’s growth of 7.6%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for its earnings is pegged at $2.90 for fiscal 2021 (ending September 2021) and $3.43 for fiscal 2022 (ending September 2022). The estimates reflect no change from the 60-day-ago figures.
In the past 30 days, earnings estimates for these companies have improved for the current year. Also, earnings surprise for the last reported quarter was 11.76% for Regal Beloit, 10.97% for Eaton and 41.94% for AZZ.
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ESCO (ESE) on Buyout Spree, Adds Phenix & Altanova to Portfolio
ESCO Technologies Inc. (ESE - Free Report) yesterday announced that it acquired Accident, MD-based Phenix Technologies, Inc. The financial terms of the transaction have been kept under wraps.
Concurrently, the company announced that it completed the buyout of Taino, Italy-based I.S.A Altanova Group S.R.L. on Jul 29, 2021. The deal was originally announced by ESCO on May 20. The financial terms of the buyout were also undisclosed.
Both acquisitions are predicted to boost ESCO’s growth opportunities in the utility and power markets. Yesterday, ESCO’s shares have gained 0.41%, ending the trading session at $94.07.
Inside the Headlines
Phenix Technologies is a leading manufacturer of portable and stationary test systems (high voltage/high power/high current) as well as related solutions and components. The products and solutions — including transformer, cable testing equipment and resonant — are used in field service organizations, electric industry and high-voltage test laboratories. Its customer base is spread across 110 countries.
Annually, Phenix Technologies generates revenues of $25 million and its operating margin is in the high teens.
The addition of Phenix Technologies to ESCO’s portfolio will strengthen the latter’s product offerings and customer base, technology and software application expertise, and engineering knowledge.
Then again, Altanova engages in providing monitoring systems and diagnostic products as well as services for electrical assets. Its products and services are mainly used in the process, power generation, renewable energy, transmission and distribution network industries. The company’s operations are spread in excess of 100 countries.
As noted, the Altanova acquisition is predicted to boost ESCO’s product offerings and geographical reach, especially in Asia and Europe. It will enable the company to leverage benefits from the growing power infrastructure market around the world. In calendar 2020, Altanova generated revenues of $30 million.
ESCO will integrate both acquired assets with its Utility Solutions Group (“USG”) segment.
The Utility Solutions Group’s business comprises operations of Doble Engineering Company and Morgan Schaffer Ltd. as well as NRG Systems, Inc. While Doble engages in making diagnostic testing solutions, NRG manufactures decision support tools to be used mainly in the renewable energy market. It generated revenues of $47.7 million in third-quarter fiscal 2021 (ended Jun 30, 2021). This accounted for 26.3% of the company’s third-quarter total revenues.
Acquiring businesses are effective ways for the company to gain access to new markets, expand its product line and enhance its customer base. Notably, it invested $6.7 million in making acquisitions (net of cash acquired) in the first three quarters of fiscal 2021 (ended June 2021).
Zacks Rank, Estimate Trend and Price Performance
With a $2.4-billion market capitalization, ESCO currently carries a Zacks Rank #3 (Hold). The company is well-positioned to benefit from its solid product offerings, exposure in diversified end markets, healthy liquidity position, cost-saving actions and buyouts. However, the persistence of softness in the commercial aerospace market is concerning.
In the past three months, the company’s shares have declined 9.1% against the industry’s growth of 7.6%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for its earnings is pegged at $2.90 for fiscal 2021 (ending September 2021) and $3.43 for fiscal 2022 (ending September 2022). The estimates reflect no change from the 60-day-ago figures.
ESCO Technologies Inc. Price and Consensus
ESCO Technologies Inc. price-consensus-chart | ESCO Technologies Inc. Quote
Some other companies from the same industry engaging in buyout activities in the year-to-date period are Regal Beloit Corporation (RBC - Free Report) , Eaton Corporation plc (ETN - Free Report) and AZZ Inc. (AZZ - Free Report) . Notably, the companies presently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 30 days, earnings estimates for these companies have improved for the current year. Also, earnings surprise for the last reported quarter was 11.76% for Regal Beloit, 10.97% for Eaton and 41.94% for AZZ.