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HEICO (HEI) Buys Pioneer Industries, Expands in Defense Space

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HEICO Corporation (HEI - Free Report) announced that its Flight Support Group has completed the acquisition of Pioneer Industries. The company entered into the agreement last month and the deal is closed after receiving all regulatory approvals.

This acquisition will expand HEICO’s operation in the specialty defense spares market and is expected to be accretive to earnings within a year following the closing of the acquisition. Pioneer Industries’ customers include the U.S. Department of Defense and companies that support the defense sector, which will undoubtedly widen Flight Support Group’s revenue base.

HEICO has been expanding its operation through acquisitions. Recently, the company completed the acquisition of 100% stock of Flight Microwave Corp. in an all-cash deal. Flight Microwave designs and manufactures custom high-power filters and filter assemblies used in space and defense applications.

HEICO Taking Inorganic Route

During fiscal first-quarter 2022, HEI acquired 100% of Paciwave, which is a specialized designer and manufacturer of radio frequency and microwave components as well as integrated assemblies, with its customers including defense contractors and electronics manufacturers both within and outside the United States.

In addition, the acquisition of Flight Microwave Corp. and Pioneer Industries will further expand Heico Corp.’s product portfolio and widen its defense customer base. During fiscal 2021, HEICO successfully completed six acquisitions.

Price Performance

Shares of HEICO have rallied 19.1% in the past year compared with the industry’s 14.3% growth.

Zacks Investment Research
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Zacks Rank & Key Picks

HEICO currently has a Zacks Rank #3 (Hold). Some better-ranked stocks from the same sector include BAE Systems plc (BAESY - Free Report) , Huntington Ingalls Industries (HII - Free Report) and Airbus Group (EADSY - Free Report) , each having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for BAE Systems’ 2022 and 2023 earnings per share implies 22.3% and 8.3% year-over-year growth, respectively. The long-term (three to five years) earnings growth of BAESY is currently projected at 5.3%.

The Zacks Consensus Estimate for Huntington Ingalls’ 2022 and 2023 earnings per share implies 14% and 18% year-over-year growth, respectively. Huntington Ingalls delivered a four-quarter average earnings surprise of 22.2%.

The Zacks Consensus Estimate for Airbus Group’s 2023 earnings per share implies 29.5% year-over-year growth. The average earnings surprise of Airbus Group in the last four quarters is 69%.