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Meritor (MTOR) Buys Fabco's Products, Extends Portfolio

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Meritor, Inc. (MTOR - Free Report) announced the acquisition of the product portfolio and technologies of Fabco Holdings, Inc. and its subsidiaries. Terms of the deal were not revealed.

The addition of Fabco Holdings' product portfolio provides Meritor an expanded suite of complementary products that includes transfer cases, gear boxes, auxiliary transmissions and power take off (PTOs) units. These products are used for medium, heavy and extra heavy automobiles for on and off-highway, construction, defense, rail and other applications.

Further, these products will enable the company to offer a wider range of services to global customers. Also, the acquisition will aid the company to diversify its customer base and expand into the unexplored arenas of rail, oil and gas industries.

Meritor, Inc. Price and Consensus

Per Jay Craig, CEO and president of Meritor, the acquired portfolio of products and technologies provides the company with new products and customers in key markets. The company expects that synergies drawn from this latest buyout will contribute to a significant development in Specialty, Defense and Off-Highway business units.

This acquisition is in line with the company’s M2019 plan to follow strategic growth initiatives and continue with its investments in new products and technologies.

Prior to the M2019 plan, the company has successfully achieved the objectives stated in its M2016 plan. The plan enhanced operational excellence and reduced debt, among other financial gains. It also obtained new customers, including PACCAR in North America, Scania in Europe, Daimler in India and DAF in South America.

Price Performance

Meritor’s stock has surged 62.6% year to date, substantially outperforming the 23.1% rally of the industry it belongs to.



Zacks Rank & Other Key Picks

Meritor currently flaunts a Zacks Rank #1 (Strong Buy).

Other top-ranked automobile stocks are Allison Transmission Holdings Inc. (ALSN - Free Report) , Ferrari N.V. (RACE - Free Report) and Toyota Motor Corporation (TM - Free Report) , all currently sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission has a long-term growth rate of 11%.

Ferrari has an expected long-term earnings growth rate of 14.1%.

Toyota has a long-term growth rate of 7%.

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