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IDEX (IEX) Enters Into Deal to Acquire Nexsight for $120M

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IDEX Corporation (IEX - Free Report) yesterday announced that it has entered into a deal to buy Nexsight, LLC and its WinCan, Envirosight, MyTana and Pipeline Renewal Technologies businesses. The deal is valued at $120 million in cash.

IDEX's shares inched up 0.5% yesterday, eventually closing the trading session at $236.37.

Headquartered in Randolph, NJ, Nexsight, through its business units, specializes in providing a comprehensive line of wastewater inspection solutions to several sectors, including utility, engineering, municipality and transportation. The company’s innovative technology is also utilized in the sewer rehabilitation market.

Acquisition Rationale

The deal is in sync with IDEX’s policy of acquiring businesses for expanding its presence and customer base in the intelligent water technologies market. The inclusion of Nexsight’s expertise in wastewater inspection space supported by its strong product portfolio and innovative capabilities will augment and boost IDEX’s iPEK and ADS business units.

The buyout will enable IDEX to expand its presence in North America and include iPEK’s major channel partner and its advanced wastewater video inspection software platform. This is also likely to enhance the capabilities of the cloud-based wastewater system monitoring and predictive analytics platform at ADS.

Upon completion of the deal, Nexsight will be integrated into the water group of IDEX’s Fluid & Metering Technology segment. The segment provides displacement pumps, injectors, flow meters and related controls for the movement of liquids and gases in various end markets, including general industrial, chemical, agricultural and water & wastewater. The segment contributed 35.3% to IDEX’s total revenues in the third quarter of 2021.

Other Notable Acquisitions

In March 2021, IDEX acquired Abel Pumps L.P., which has been strengthening its pump platform. Also, it added Airtech Group and US Valve Corporation and other entities to its portfolio in June. Acquisitions contributed 1% and 7% to revenue growth in the second and third quarters of 2021, respectively.

Zacks Rank, Estimates and Price Performance

The company, with $17.9-billion market capitalization, currently carries a Zacks Rank #3 (Hold). It is poised to benefit from a diversified business structure, strengthening end markets and buyouts in the quarters ahead. However, weakness in the energy, chemical, automotive, and fire-rescue markets might affect its performance.

The Zacks Consensus Estimate for IDEX’s earnings is pegged at $6.35 for 2021 and $7.10 for 2022, suggesting growth of 0.2% and 0.7% from the respective 30-day-ago figures.

Zacks Investment ResearchImage Source: Zacks Investment Research

The company’s shares have gained 5.3% against a 0.4% decline recorded by the industry in the past three months.

Key Picks

Some better-ranked companies from the Zacks Industrial Products sector are discussed below.

SPX FLOW, Inc. presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Its earnings surprise in the last four quarters was 40.42%, on average.

In the past 30 days, SPX FLOW’s earnings estimates have increased 8% for 2021 and 17.9% for 2022. Its shares have gained 9.2% in the past three months.

Welbilt, Inc. (WBT - Free Report) presently carries a Zacks Rank #2. Its earnings surprise in the last four quarters was 172.50%, on average.

Welbilt’s earnings estimates have increased 3.2% for 2021 and 5.9% for 2022 in the past 30 days. Its shares have gained 1.3% in the past three months.

Applied Industrial Technologies, Inc. (AIT - Free Report) presently carries a Zacks Rank #2. Its earnings surprise in the last four quarters was 26.71%, on average.

Applied Industrial’s earnings estimates have increased 1.9% for fiscal 2022 (ending June 2022) and 2.2% for fiscal 2023 (ending June 2023) in the past 30 days. Its shares have gained 20.4% in the past three months.


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