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Rogers' (ROG) Griswold Buyout In Line With Growth Strategy

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Rogers Corporation (ROG - Free Report) recently announced the acquisition of Griswold, a custom-engineered cellular elastomer and high-performance polyurethane manufacturer, for an undisclosed amount.

The acquisition is expected to expand Rogers’ product portfolio and thereby enhance its Elastomeric Material Solutions (EMS) segment. The company also expects the acquisition to be accretive to 2019 earnings per share.

Acquisitions Driving Growth

Apart from Griswold, Rogers has so far completed three other strategic acquisitions. In January 2017, the company acquired Diversified Silicone Products, a custom silicone product development and manufacturing business.

In November 2016, the company had acquired DeWAL Industries, a manufacturer of polytetrafluoroethylene and ultra-high molecular weight polyethylene films, pressure sensitive tapes and specialty products for the industrial, aerospace, automotive, and electronics markets.

In January 2015, Arlon, a leading manufacturer of high performance materials for the printed circuit board industry and silicone rubber-based materials, was acquired by Rogers.

Revenue (TTM)

Revenue (TTM) | Quote

According to Rogers, the successful integration of DeWAL and DSP into the company’s EMS segment has expanded its product offerings and helped it cater to customer needs.

In fiscal 2017, the company’s net sales of $821 million increased 25.1% year over year driven by significant contribution from EMS segment.

Sales of EMS segment increased 53.9% from fiscal 2016 to $312.7 million. The company generated 38% of total sales from EMS in fiscal 2017, which also displayed a rising trend when compared with the previous two fiscals (30% in 2016 and 28% in 2015).

The company stated that the acquisitions of DeWAL and DSP and higher end-market demand from core markets, including automotive, mass transit, portable electronics, general industrial, and consumer products applications have been the key growth drivers.

We believe that the company will continue to pursue accretive acquisitions, which will boost its market share and customer base going forward.

Zacks Rank and Stocks to Consider

Rogers currently has a Zacks Rank #3 (Hold).

A few-better ranked stocks in the broader technology sector are YY Inc. (YY - Free Report) , Science Applications (SAIC - Free Report) and Verint Systems (VRNT - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see  the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for YY, Science Applications and Verint is projected to be 26.4%, 5% and 10%, respectively.

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