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Curtiss-Wright (CW) Completes the Acquisition of Keronite Group
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Curtiss-Wright Corporation (CW - Free Report) recently announced the completion of the acquisition of Keronite Group Limited. Acquired for a cash consideration of $35 million, the buyout is likely to boost Curtiss-Wright’s capabilities in Plasma Electrolytic Oxidation (“PEO”) surface treatment services.
With operations under Curtiss-Wright’s Aerospace & Industrial segment, the acquisition is likely to be neutral to the company’s earnings in its first year. Moreover, it is likely to provide a 100% free cash flow conversion rate, indicating strength in the liquidity position. This can be further used for profitable and revenue-generating strategies.
Benefits of the Acquisition
The acquisition will aid Curtiss-Wright in strengthening its treatment service portfolio. Also, Keronite’s advanced technologies will assist the company in providing upgraded services to its customers. This is likely to increase CW’s customer base.
Curtiss-Wright’s already long-standing customer relationships and global sales channels, in combination with Keronite’s business portfolio and advanced technology, are likely to boost the growth trajectory of the company. This will significantly bolster its profitability in the long term.
Additionally, with the acquisition, Curtiss-Wright aims to enhance its prospects of order inflows, fueled by its improved product range, thus supporting and meeting the evolving needs of the defense landscape. This is likely to bolster its top-line performance in the long haul.
Peer Moves
Companies make strategic acquisitions mainly to grow their business strength and increase their market share by entering new markets. In this context, apart from Curtiss-Wright, defense majors that have successfully acquired other companies to build on their competitive edge are as follows:
In March 2022, HEICO Corporation (HEI - Free Report) announced that its Flight Support Group completed the acquisition of Pioneer Industries. HEICO expects the acquisition to be accretive to its earnings within the year following closing.
HEI boasts a long-term earnings growth rate of 12.6%. HEICO shares have increased 9.2% in the past year.
In May 2022, Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) revealed that it acquired Alabama-based Southern Research’s Engineering division for a consideration of $80 million.
The Zacks Consensus Estimate for Kratos’ 2022 sales suggests a growth rate of 10.9% from the prior-year reported figure. KTOS shares have increased 0.2% in the past month.
In March 2022, TransDigm Group Incorporated (TDG - Free Report) announced that it entered into a definitive agreement to acquire DART Aerospace for approximately $360 million in cash.
TDG’s long-term earnings growth rate is pegged at 18.9%. The company’s shares have risen 14.2% in the past six months.
Price Movement
In the past year, shares of Curtiss-Wright have rallied 34.6% against the industry’s decline of 3%.
Image: Bigstock
Curtiss-Wright (CW) Completes the Acquisition of Keronite Group
Curtiss-Wright Corporation (CW - Free Report) recently announced the completion of the acquisition of Keronite Group Limited. Acquired for a cash consideration of $35 million, the buyout is likely to boost Curtiss-Wright’s capabilities in Plasma Electrolytic Oxidation (“PEO”) surface treatment services.
With operations under Curtiss-Wright’s Aerospace & Industrial segment, the acquisition is likely to be neutral to the company’s earnings in its first year. Moreover, it is likely to provide a 100% free cash flow conversion rate, indicating strength in the liquidity position. This can be further used for profitable and revenue-generating strategies.
Benefits of the Acquisition
The acquisition will aid Curtiss-Wright in strengthening its treatment service portfolio. Also, Keronite’s advanced technologies will assist the company in providing upgraded services to its customers. This is likely to increase CW’s customer base.
Curtiss-Wright’s already long-standing customer relationships and global sales channels, in combination with Keronite’s business portfolio and advanced technology, are likely to boost the growth trajectory of the company. This will significantly bolster its profitability in the long term.
Additionally, with the acquisition, Curtiss-Wright aims to enhance its prospects of order inflows, fueled by its improved product range, thus supporting and meeting the evolving needs of the defense landscape. This is likely to bolster its top-line performance in the long haul.
Peer Moves
Companies make strategic acquisitions mainly to grow their business strength and increase their market share by entering new markets. In this context, apart from Curtiss-Wright, defense majors that have successfully acquired other companies to build on their competitive edge are as follows:
In March 2022, HEICO Corporation (HEI - Free Report) announced that its Flight Support Group completed the acquisition of Pioneer Industries. HEICO expects the acquisition to be accretive to its earnings within the year following closing.
HEI boasts a long-term earnings growth rate of 12.6%. HEICO shares have increased 9.2% in the past year.
In May 2022, Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) revealed that it acquired Alabama-based Southern Research’s Engineering division for a consideration of $80 million.
The Zacks Consensus Estimate for Kratos’ 2022 sales suggests a growth rate of 10.9% from the prior-year reported figure. KTOS shares have increased 0.2% in the past month.
In March 2022, TransDigm Group Incorporated (TDG - Free Report) announced that it entered into a definitive agreement to acquire DART Aerospace for approximately $360 million in cash.
TDG’s long-term earnings growth rate is pegged at 18.9%. The company’s shares have risen 14.2% in the past six months.
Price Movement
In the past year, shares of Curtiss-Wright have rallied 34.6% against the industry’s decline of 3%.
Image Source: Zacks Investment Research
Zacks Rank
Curtiss-Wright currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.