We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Flowserve (FLS) to Acquire Montreal-Based Velan for $245M
Read MoreHide Full Article
Flowserve (FLS - Free Report) has entered into a definitive agreement to acquire Montreal-based industrial valves manufacturer, Velan, in an all-cash transaction valued at approximately $245 million (C$329 million).
Given Velan’s strong presence in nuclear, cryogenic and defense markets, the acquisition will accelerate FLS’ Diversification, Decarbonization and Digitization (3D) strategy. The transaction is also expected to generate significant aftermarket revenue and bring synergies for FLS.
Flowserve expects the transaction to generate approximately $20 million (C$26 million) of run-rate cost synergies within two years of closing. The acquisition is expected to be completed by the second quarter of 2023, and Velan will be part of FLS’ Flow Control Division segment.
The acquisition of Velan will help Flowserve maintain a significant presence in Québec. Upon completion, the transaction is expected to be accretive to Flowserve’s adjusted EPS in the first full year.
2023 Guidance
Separately, Flowserve initiated its 2023 guidance. For 2023, the company expects revenues to increase 9-11% year over year. The company anticipates reported earnings of $1.40-$1.65 per share. Adjusted earnings are estimated to be in the band of $1.50-$1.75 per share. The mid-point of the guided range — $1.63 — lies below the Zacks Consensus Estimate of $1.69.
FLS expects an adjusted tax rate of 18-20%. Capital expenditures are estimated to be $75-$85 million. The company expects improved operational cadence, effective pricing actions and cost-reduction efforts to lead to a year-over-year increase in adjusted earnings and margins.
Zacks Rank & Key Picks
Flowserve currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks within the broader Industrial Products sector are as follows:
Allegion has an estimated earnings growth rate of 5.2% and 12.1% for 2022 and 2023, respectively. The stock has gained 10.1% in the past six months.
Valmont Industries, Inc. (VMI - Free Report) presently has a Zacks Rank of 2. VMI delivered a trailing four-quarter earnings surprise of 12.5%, on average.
Valmont Industries has an estimated earnings growth rate of 26.7% and 13.7% for 2022 and 2023, respectively. The stock has rallied 10.2% in the past six months.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Flowserve (FLS) to Acquire Montreal-Based Velan for $245M
Flowserve (FLS - Free Report) has entered into a definitive agreement to acquire Montreal-based industrial valves manufacturer, Velan, in an all-cash transaction valued at approximately $245 million (C$329 million).
Given Velan’s strong presence in nuclear, cryogenic and defense markets, the acquisition will accelerate FLS’ Diversification, Decarbonization and Digitization (3D) strategy. The transaction is also expected to generate significant aftermarket revenue and bring synergies for FLS.
Flowserve expects the transaction to generate approximately $20 million (C$26 million) of run-rate cost synergies within two years of closing. The acquisition is expected to be completed by the second quarter of 2023, and Velan will be part of FLS’ Flow Control Division segment.
Flowserve Corporation Price
Flowserve Corporation price | Flowserve Corporation Quote
The acquisition of Velan will help Flowserve maintain a significant presence in Québec. Upon completion, the transaction is expected to be accretive to Flowserve’s adjusted EPS in the first full year.
2023 Guidance
Separately, Flowserve initiated its 2023 guidance. For 2023, the company expects revenues to increase 9-11% year over year. The company anticipates reported earnings of $1.40-$1.65 per share. Adjusted earnings are estimated to be in the band of $1.50-$1.75 per share. The mid-point of the guided range — $1.63 — lies below the Zacks Consensus Estimate of $1.69.
FLS expects an adjusted tax rate of 18-20%. Capital expenditures are estimated to be $75-$85 million. The company expects improved operational cadence, effective pricing actions and cost-reduction efforts to lead to a year-over-year increase in adjusted earnings and margins.
Zacks Rank & Key Picks
Flowserve currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks within the broader Industrial Products sector are as follows:
Allegion plc (ALLE - Free Report) presently carries a Zacks Rank #2 (Buy). ALLE pulled off a trailing four-quarter earnings surprise of 8.8%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks.
Allegion has an estimated earnings growth rate of 5.2% and 12.1% for 2022 and 2023, respectively. The stock has gained 10.1% in the past six months.
Valmont Industries, Inc. (VMI - Free Report) presently has a Zacks Rank of 2. VMI delivered a trailing four-quarter earnings surprise of 12.5%, on average.
Valmont Industries has an estimated earnings growth rate of 26.7% and 13.7% for 2022 and 2023, respectively. The stock has rallied 10.2% in the past six months.