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Altra Industrial (AIMC) Buys Nook, Boosts Product Offerings
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Altra Industrial Motion Corp. recently announced that it has completed the acquisition of Nook Industries LLC. The financial terms of the transaction were kept under wraps.
Altra Industrial’s shares declined 0.5% yesterday to eventually close the trading session at $51.34.
Headquartered in Cleveland, OH, Nook Industries is a leading provider of a wide range of linear motion solutions. Products offered by the company include the likes of ball screws, acme screws, jacks, modular actuators and electric actuators. It has a solid customer base in the Greater Cleveland community. For 2021, the company’s revenues are expected to be about $42 million.
Acquisition Rationale
Nook Industries is believed to be a strategic fit for Altra Industrial. The inclusion of Nook Industries’ solid product line, supported by its strong designing and manufacturing capabilities, will enable Altra Industrial to expand its linear motion control product offerings. As noted, the buyout is likely to expand the company’s presence in factory automation, medical and defense end markets.
In 2022, Altra Industrial expects the buyout to be cash accretive to its earnings, excluding costs related to the transaction. The company anticipates realizing around $6 million of annual cost and sales synergies by the fourth year. Also, a tax benefit (with $12-$15 million of net present value) is expected from the transaction.
Nook Industries will be integrated into Altra Industrial's Automation & Specialty segment. The segment includes the results of the majority of product brands, including Kollmorgen, Thomson, Portescap and Jacobs Vehicle Systems.
Zacks Rank, Price Performance and Estimate Revisions
Altra Industrial, with approximately $3.3 billion market capitalization, currently carries a Zacks Rank #3 (Hold). The company is poised to gain from solid orders, healthy backlog, a healthy liquidity position and shareholder-friendly policies. Its pricing actions and cross-selling activities are other tailwinds. Supply-chain issues, along with higher costs of raw materials, logistics and labor, are concerning.
In the past 60 days, the Zacks Consensus Estimate for the company’s earnings have been stable at 78 cents for fourth-quarter 2021.
Image Source: Zacks Investment Research
In the past three months, its shares have lost 8.3% against the industry’s growth of 11.2%.
Key Picks
Some better-ranked companies from the same space are discussed below.
In the past 60 days, Helios’ earnings estimates have increased 7.9% for 2022. Its shares have gained 18.8% in the past three months.
Ingersoll Rand Inc. (IR - Free Report) presently carries a Zacks Rank #2 (Buy). Its earnings surprise in the last four quarters was 19.78%, on average.
In the past 60 days, Ingersoll Rand’s earnings estimates have increased 11.7% for 2022. Its shares have gained 16.4% in the past three months.
Kadant Inc. (KAI - Free Report) presently carries a Zacks Rank #2. Its earnings surprise in the last four quarters was 19.21%, on average.
Kadant’s earnings estimates have increased 1.2% for 2022 in the past 60 days. Its shares have gained9.1% in the past three months.
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Altra Industrial (AIMC) Buys Nook, Boosts Product Offerings
Altra Industrial Motion Corp. recently announced that it has completed the acquisition of Nook Industries LLC. The financial terms of the transaction were kept under wraps.
Altra Industrial’s shares declined 0.5% yesterday to eventually close the trading session at $51.34.
Headquartered in Cleveland, OH, Nook Industries is a leading provider of a wide range of linear motion solutions. Products offered by the company include the likes of ball screws, acme screws, jacks, modular actuators and electric actuators. It has a solid customer base in the Greater Cleveland community. For 2021, the company’s revenues are expected to be about $42 million.
Acquisition Rationale
Nook Industries is believed to be a strategic fit for Altra Industrial. The inclusion of Nook Industries’ solid product line, supported by its strong designing and manufacturing capabilities, will enable Altra Industrial to expand its linear motion control product offerings. As noted, the buyout is likely to expand the company’s presence in factory automation, medical and defense end markets.
In 2022, Altra Industrial expects the buyout to be cash accretive to its earnings, excluding costs related to the transaction. The company anticipates realizing around $6 million of annual cost and sales synergies by the fourth year. Also, a tax benefit (with $12-$15 million of net present value) is expected from the transaction.
Nook Industries will be integrated into Altra Industrial's Automation & Specialty segment. The segment includes the results of the majority of product brands, including Kollmorgen, Thomson, Portescap and Jacobs Vehicle Systems.
Zacks Rank, Price Performance and Estimate Revisions
Altra Industrial, with approximately $3.3 billion market capitalization, currently carries a Zacks Rank #3 (Hold). The company is poised to gain from solid orders, healthy backlog, a healthy liquidity position and shareholder-friendly policies. Its pricing actions and cross-selling activities are other tailwinds. Supply-chain issues, along with higher costs of raw materials, logistics and labor, are concerning.
In the past 60 days, the Zacks Consensus Estimate for the company’s earnings have been stable at 78 cents for fourth-quarter 2021.
In the past three months, its shares have lost 8.3% against the industry’s growth of 11.2%.
Key Picks
Some better-ranked companies from the same space are discussed below.
Helios Technologies, Inc. (HLIO - Free Report) 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 37.54%, on average.
In the past 60 days, Helios’ earnings estimates have increased 7.9% for 2022. Its shares have gained 18.8% in the past three months.
Ingersoll Rand Inc. (IR - Free Report) presently carries a Zacks Rank #2 (Buy). Its earnings surprise in the last four quarters was 19.78%, on average.
In the past 60 days, Ingersoll Rand’s earnings estimates have increased 11.7% for 2022. Its shares have gained 16.4% in the past three months.
Kadant Inc. (KAI - Free Report) presently carries a Zacks Rank #2. Its earnings surprise in the last four quarters was 19.21%, on average.
Kadant’s earnings estimates have increased 1.2% for 2022 in the past 60 days. Its shares have gained9.1% in the past three months.