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Colfax Completes Divestment of Fluid Handling Unit to CIRCOR
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Machinery company Colfax Corporation announced yesterday that it has completed the sale of its Fluid Handling business to CIRCOR International, Inc for approximately $863 million. The deal was announced on Sep 27.
The company’s Fluid Handling business offered products like pumps, fluid handling systems and controls, and specialty valves. Prime brands include Allweiler and Imo. The results of this business were grouped under the company’s Gas and Fluid Handling segment (now renamed to Air and Gas Handling). In the 12 months ended Jun 30, 2017, the divested assets generated revenues of $463 million and earnings before interest, tax, depreciation and amortization of $64 million.
Divestment Details
As noted, the divestment proceeds of $863 million included cash component of $542 million and assumption of certain net pension liability. In addition, CIRCOR issued approximately 3.3 million of its common shares to Colfax. The stocks, valued at closing price of trading on Dec 8, would represent roughly 16% of CIRCOR’s issued and outstanding shares.
The company anticipates recording a material gain related with the divestiture in the fourth quarter of 2017.
Inorganic Expansion Fuels Growth
We believe that such dispositions are in sync with Colfax’s inorganic ways of strengthening its core businesses. The company aims to enhance its ESAB and Howden businesses through meaningful acquisitions. Building new business platforms is also a priority.
Notably, in second-quarter 2017, Colfax acquired TBi, a leader in robotic torch technology, and HKS, a developer of advanced process analytics and sensors. These buyouts have strengthened the company’s welding process analytics and robotic welding torches operations in the Fabrication Technology segment. Also, in October, it completed acquiring Siemens AG’s Siemens Turbomachinery Equipment GmbH business. This strategic acquisition will solidify Colfax’s Howden trading platform.
In the first nine months of 2017, Colfax’s acquired assets contributed roughly 1.3% to year-over-year sales growth.
Zacks Rank & Stocks to Consider
Colfax currently has a $4.5 billion market capitalization and carries a Zacks Rank #3 (Hold). Despite the positive aspects, we believe that company’s exposure to headwinds from uncertain global economic conditions, unfavorable forex movements and stiff competition might be concerns. In the last three months, Colfax’s shares have declined 11.8%, underperforming 9.4% gain recorded by the industry it belongs to.
Also, over the last 60 days, the stock’s Zacks Consensus Estimate of $1.71 for 2017 has increased 1.2% from its tally 60 days ago while that of $1.77 for 2018 has decreased 7.8%.
Some better-ranked stocks in the industry are Kadant Inc. (KAI - Free Report) , Sun Hydraulics Corporation and Altra Industrial Motion Corporation . While Kadant and Sun Hydraulics sport a Zacks Rank #1 (Strong Buy), Altra Industrial Motion carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kadant pulled off an average positive earnings surprise of 20.32% in the last four quarters. Also, earnings estimates for 2017 and 2018 were revised upward in the last 60 days.
Sun Hydraulics delivered an average positive earnings surprise of 9.58% in the trailing four quarters. Also, bottom-line expectations for 2017 and 2018 improved over the past 60 days.
Altra Industrial Motion’s financial performance was impressive, with an average positive earnings surprise of 17.30% in the last four quarters. Also, earnings estimates for 2017 and 2018 were revised upward over the last 60 days.
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Colfax Completes Divestment of Fluid Handling Unit to CIRCOR
Machinery company Colfax Corporation announced yesterday that it has completed the sale of its Fluid Handling business to CIRCOR International, Inc for approximately $863 million. The deal was announced on Sep 27.
The company’s Fluid Handling business offered products like pumps, fluid handling systems and controls, and specialty valves. Prime brands include Allweiler and Imo. The results of this business were grouped under the company’s Gas and Fluid Handling segment (now renamed to Air and Gas Handling). In the 12 months ended Jun 30, 2017, the divested assets generated revenues of $463 million and earnings before interest, tax, depreciation and amortization of $64 million.
Divestment Details
As noted, the divestment proceeds of $863 million included cash component of $542 million and assumption of certain net pension liability. In addition, CIRCOR issued approximately 3.3 million of its common shares to Colfax. The stocks, valued at closing price of trading on Dec 8, would represent roughly 16% of CIRCOR’s issued and outstanding shares.
The company anticipates recording a material gain related with the divestiture in the fourth quarter of 2017.
Inorganic Expansion Fuels Growth
We believe that such dispositions are in sync with Colfax’s inorganic ways of strengthening its core businesses. The company aims to enhance its ESAB and Howden businesses through meaningful acquisitions. Building new business platforms is also a priority.
Notably, in second-quarter 2017, Colfax acquired TBi, a leader in robotic torch technology, and HKS, a developer of advanced process analytics and sensors. These buyouts have strengthened the company’s welding process analytics and robotic welding torches operations in the Fabrication Technology segment. Also, in October, it completed acquiring Siemens AG’s Siemens Turbomachinery Equipment GmbH business. This strategic acquisition will solidify Colfax’s Howden trading platform.
In the first nine months of 2017, Colfax’s acquired assets contributed roughly 1.3% to year-over-year sales growth.
Zacks Rank & Stocks to Consider
Colfax currently has a $4.5 billion market capitalization and carries a Zacks Rank #3 (Hold). Despite the positive aspects, we believe that company’s exposure to headwinds from uncertain global economic conditions, unfavorable forex movements and stiff competition might be concerns. In the last three months, Colfax’s shares have declined 11.8%, underperforming 9.4% gain recorded by the industry it belongs to.
Also, over the last 60 days, the stock’s Zacks Consensus Estimate of $1.71 for 2017 has increased 1.2% from its tally 60 days ago while that of $1.77 for 2018 has decreased 7.8%.
Colfax Corporation Price and Consensus
Colfax Corporation Price and Consensus | Colfax Corporation Quote
Some better-ranked stocks in the industry are Kadant Inc. (KAI - Free Report) , Sun Hydraulics Corporation and Altra Industrial Motion Corporation . While Kadant and Sun Hydraulics sport a Zacks Rank #1 (Strong Buy), Altra Industrial Motion carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kadant pulled off an average positive earnings surprise of 20.32% in the last four quarters. Also, earnings estimates for 2017 and 2018 were revised upward in the last 60 days.
Sun Hydraulics delivered an average positive earnings surprise of 9.58% in the trailing four quarters. Also, bottom-line expectations for 2017 and 2018 improved over the past 60 days.
Altra Industrial Motion’s financial performance was impressive, with an average positive earnings surprise of 17.30% in the last four quarters. Also, earnings estimates for 2017 and 2018 were revised upward over the last 60 days.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>