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Valmont (VMI) Buys Walpar, Expands in Sign Structures Market

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Valmont Industries, Inc. (VMI - Free Report) recently announced the acquisition of Walpar, LLC — an industry-leading manufacturer of engineered overhead sign structures for the North America transportation market. The deal has been funded with cash and a portion of the proceeds is payable in early 2019.
 
As of Jul 31, 2018, Walpar had revenues of around $22 million for the trailing 12-month period.  The acquisition, which is in sync with Valmont’s growth strategy, will help the company enhance capabilities and participation in the sign structures market. The deal testifies the company’s commitments toward stronger participation in this market and also creates opportunities for growth in adjacent transportation market. Valmont expects to achieve first-year earnings accretion of around 12 cents per share from the acquisition.

In the past six months, Valmont’s shares have lost 8.4% against the industry’s 9.3% growth.


 

Valmont remains optimistic about its markets and businesses for the rest of 2018. As a result of pricing actions and improved demand in the lighting and traffic business, Valmont anticipates favorable revenue and profit comparisons in the Engineered Support Structures segment.
 
However, results in the Irrigation segment are expected to deteriorate from last year due to challenging end-market conditions. Owing to strong industrial demand, the Coatings segment is expected to perform in line with first-half results.
 

Valmont Industries, Inc. Price and Consensus

Zacks Rank & Stocks to Consider

Valmont currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the basic materials space are Huntsman Corporation (HUN - Free Report) , Celanese Corporation (CE - Free Report) and Air Products and Chemicals, Inc. (APD - Free Report) .

Huntsman has an expected long-term earnings growth rate of 8.5% and a Zacks Rank #1 (Strong Buy). The company’s shares have soared 29.8% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Celanese has an expected long-term earnings growth rate of 10% and carries a Zacks Rank #1. The stock has rallied 21.7% in a year.

Air Products has an expected long-term earnings growth rate of 16.1% and a Zacks Rank #2 (Buy). Its shares have gained 10.9% in a year’s time.

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