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Bruker Buys OST, To Expand in Superconducting Wires Market

BRKR BAX NXTM BVX

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Bruker Corporation (BRKR - Free Report) recently announced that it has acquired Oxford Instruments plc’s Oxford Instruments Superconducting Wire LLC (OST) for a total consideration of $17.5 million. Specifically, the deal was inked by Bruker’s subsidiary, Bruker Energy and Supercon Technologies (BEST), which has acquired all shares of OST.

We note that BEST designs, manufactures and distributes superconducting materials, primarily metallic low temperature superconductors, for use in magnetic resonance imaging, nuclear magnetic resonance, fusion energy research and other applications. Post completion of the buyout, BEST plans to integrate the OST business within its advanced superconducting materials business. It will also be one of the two major development and production sites for low-temperature superconductors (LTS).

According to Bruker, the acquisition will be a strategic fit for BEST as it will expand the latter’s technology portfolio with OST's unique Rod Restack Process (RRP) conductor portfolio. Notably, this RRP conductor portfolio has already been used by leading international fusion and high-energy physics projects that require highest magnetic fields.

These superconducting wires are commonly used in healthcare and scientific instrumentation, particularly in the field of magnetic resonance imaging (MRI) and nuclear magnetic resonance (NMR) magnets. These are also used for high-energy physics and fusion, accelerator, confinement and detector magnets in 'big science' projects.

The acquisition of OST will fortify BEST’s position in the LTS market where the company already has a strong hold based on its capacity, automation and quality control investments. With the integration of OST, BEST hopes to emerge as a world-leading LTS provider with an extensive product portfolio and technology, highest productivity, and advanced conductor performance and quality. This will also expand BEST’s LTS capacity with foray into the U.S. and China markets, as well as the superconductivity and magnet research community.

In this regard, it should be noted that in an effort to streamline its operations, Bruker has pursued a number of strategies over the past for various productivity improvement initiatives at BEST. These include the divestiture of certain non-core businesses, outsourcing of various manufacturing activities, and transferring or ceasing operations at certain facilities. Hence, the latest acquisition of OST, which generated revenues of £19.1 million (GBP) and operating profit of £1.1 million over the past six months, is expected to bolster BEST’s performance down the line.

Zacks Rank & Key Picks

Bruker currently carries a Zacks Rank #2 (Buy). Some other top-ranked medical stocks are Nxstage Medical Inc. (NXTM - Free Report) , Baxter International Inc. (BAX - Free Report) and Bovie Medical Corporation (BVX - Free Report) . Nxstage Medical and Baxter sport a Zacks Rank #1 (Strong Buy), while Bovie Medical carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nxstage Medical surged 34.8% in the last one year compared to the S&P 500’s 4.4% over the same period. The company has a four-quarter average positive earnings surprise of 50.00%.

Baxter International rallied 23.2% year to date, much higher than the S&P 500’s 6.7%. It has a trailing four-quarter average positive earnings surprise of 27%.

Bovie Medical recorded a 125.5% gain in the past one year, way better than the S&P 500’s 4.4%. The company has a trailing four-quarter average positive earnings surprise of 28.7%

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