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UFP (UFPI) Affiliate Buys Majority Stake in India's Ficus Pax

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UFP Industries, Inc.’s (UFPI - Free Report) affiliate — UFP Global Holdings Ltd. — took over the majority stake of Ficus Pax Private Limited, which marks the company’s foray into India. The transaction is valued at $13.5 million. This buyout is in line with the company’s goal of becoming the leading packaging solutions provider in the world.

Based in Bangalore, India, Ficus Pax is a leading producer of industrial packaging in India that manufactures mixed-material cases and crates, nail-less plywood boxes, wooden pallets as well as other packaging products. With the acquisition of 70% of the equity in Ficus Pax, UFP will get hold of 10 facilities of the latter located in major industrial markets throughout southern India.

Ficus Pax generated $39 million of sales over the trailing 12 months through August 2021.

Ficus Pax also owns the majority stake of a manufacturer of corrugated fiber board containers, corrugated pallets and display solutions — Wadpack.

Dick McBride, UFP’s executive vice president of international operations, said. “Ficus Pax is a leader in innovation, with a talented design and engineering team and considerable experience in producing high-value packaging solutions for domestic and multinational customers. We look forward to working together to grow our business with new and existing customers worldwide.”

UFP’s Buyouts: A Boon

Acquisitions have been UFP Industries' preferred mode of solidifying its product portfolio and leveraging new business opportunities. On Sep 27, the company acquired the operating assets of Haleyville, AL-based Shelter Products, Inc. for $6.5 million. Shelter Products’ 87,800 sq.-ft. warehouse provides distribution and logistics support to manufactured housing industry customers. Its close proximity to a UFP manufacturing facility, which supplies trusses to manufactured housing builders, will enable additional operational synergies.

Earlier on Apr 29, UFP Industries announced that one of its subsidiaries had acquired Minneapolis, MN-based Endurable Building Products, LLC. Endurable is a leading manufacturer of customized structural aluminum systems and products for exterior purposes like deck framing, balconies, sunshades, railings as well as stairs.

Again on Apr 19, 2021, the company acquired Walnut Hollow Farm, which produces a variety of finely finished wood surfaces used in hobby, craft, and woodworking projects as well as taxidermy. Additionally, Sunbelt Forest Products completed the acquisition of Spartanburg Forest Products and its affiliates on Apr 12, 2021. Both the buyouts will expand UFP Retail Solutions’ customer base and product offerings.

Share Price Performance

Zacks Investment ResearchImage Source: Zacks Investment Research

UFP shares have gained 62.4% year to date compared with the Zacks Building Products – Wood industry’s 33.6% rally. Also, earnings estimates for 2021 have increased 4.2% to $7.64 per share over the past 30 days, indicating 91% year-over-year growth. UFP is benefiting from a solid U.S. residential market and high demand for repair and remodeling activities. Also, buyout gains and shareholders' rewards will work in its favor.

Zacks Rank & Key Picks

UFP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the broader construction sector include Rayonier Inc. (RYN - Free Report) , James Hardie Industries plc (JHX - Free Report) and Construction Partners, Inc. (ROAD - Free Report) .

Rayonier, a Zacks Rank #1 stock, is expected to witness 128% growth in 2021 earnings.

Rayonier has a trailing four-quarter earnings surprise of 82.5%, on average. Shares of the company have jumped 35.7% year to date.

James Hardie Industries, also Zacks Rank #1 stock, is expected to witness 34% growth in earnings for this year.

James Hardie Industries’ earnings estimates for the current fiscal year grew to $1.38 per share from $1.34 over the past 30 days. Shares of the company have jumped 35.3% year to date.

Construction Partners — a Zacks Rank #2 (Buy) company — is likely to witness 54.4% earnings growth this year.

Construction Partners’ earnings estimates for the current fiscal year grew to 97 cents per share from 95 cents over the past seven days. Shares of the company have jumped 34.4% year to date.