Fortive Corporation (FTV - Free Report) recently announced that it has agreed to acquire Landauer Inc. , a leader in radiation science and services. The deal is valued at approximately $770 million, including debt and net of acquired cash.
The deal is subject to regulatory approval and expected to close by the end of this year. It has been unanimously approved by Landauer's Board of Directors.
Following the announcement, Fortive’s share price increased 1.30% to $65.57. However, its shares have returned 22.3% year to date, underperforming the industry’s gain of 33.9%.
More Into the Headlines
Landauer Inc. is the world's leading provider of analytical services to determine occupational and environmental radiation exposure. Its services include manufacturing various types of radiation detection monitors, distribution and collection of the monitors to and from clients, and analysis and reporting of exposure findings.
In 2016, the company generated annual revenues of $143 million.
Post acquisition, Landauer will become part of Fortive’s field solutions platform. This platform includes Fortive’s Fluke and Qualitrol businesses, which make test and measurement tools and precision equipment for utilities, power companies and other industries.
In the last reported second quarter, Field Solutions’ core revenues were up mid-single digits with both Fluke and Qualitrol posting strong core revenue growth.
The deal is in sync with the company’s strategy to strengthen its teams with advanced talent and technology.The acquisition will further strengthen Fortive’s field solutions portfolio and compliment its customer base.
Fortive’s String of Acquisitions
Fortive has been on a buyout spree to increase its penetration into existing markets, expand in others and also fight competition.
In July, Fortive agreed to acquire Industrial Scientific Corporation, a leading provider of portable gas detection equipment and a safety-as-a-service pioneer. The deal is expected to close by the end of 2017.
The acquisition is expected to enhance the company’s digital strategy, thereby creating a stronger platform for connected solutions. These solutions can be used for applications in maintenance and safety.
Last year, the company strengthened its position in the IoT space through eMaint Enterprises. It also added some important transportation technologies through the acquisition of GTT, a global leader in priority traffic control technology for public transit and emergency vehicles.
We believe that the company’s Transportation Technologies platform, ongoing margin expansion owing to the Fortive Business System and acquisitions will drive Fortive’s growth, going forward.
However, foreign exchange risks, increased investments, increasing competition across geographies and end-market cyclicality remain risks.
Fortive currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader technology space are Lam Research Corporation (LRCX - Free Report) and Stamps.com Inc. (STMP - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Lam Research delivered a positive earnings surprise of 4.44%, on average, in the trailing four quarters.
Stamps.com Inc. delivered a positive earnings surprise of 30.64%, on average, in the last four quarters.
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