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Carlisle (CSL) Closes Petersen Aluminum Buyout for $197M Cash

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Carlisle Companies Incorporated (CSL - Free Report) has announced that it successfully completed the acquisition of Elk Grove Village, IL-based Petersen Aluminum Corporation. The transaction value of approximately $197 million was settled in cash.

It is worth mentioning here that the company’s stock price increased roughly 0.6% at the close of the trading session on Jan 11, 2019. The closing price on that day was $106.26.

Petersen Aluminum is primarily engaged in manufacturing metal roofing products for use in the industrial, commercial, agricultural, residential and institutional end markets. The firm’s high-quality product offerings include wall and metal roofs panels, perimeter roof edge systems, flat sheets of steel and aluminum, coils, and other products. Its most popular brand is PAC-CLAD. The firm was founded in 1965. It generates approximately $160 million in revenues annually.

Details of the Buyout

Per the terms of the agreement, the buyout was executed through Carlisle Companies’ segment — Carlisle Construction Materials (“CCM”). The company’s CCM segment manufactures waterproofing and roofing products for use in the industrial, and commercial end markets. The segment is also the leading manufacturer and supplier of rubber roofing systems in Europe. Revenues generated from the CCM segment accounted for roughly 65.8% of Carlisle Companies’ revenues in third-quarter 2018.

The Petersen Aluminum buyout is anticipated to expand CCM segment’s product offerings in the metal roofing platform, helping generate annual synergies of approximately $4 million. Further, this takeover will enable Carlisle Companies to easily penetrate the markets of Arizona, Texas, the Midwest and Georgia.

Snapshot of Carlisle Companies’ Buyout Activities

We believe that the above-mentioned transaction is in line with Carlisle’s policy of acquiring businesses to gain access to new customers, regions and product lines.

Prior to the Petersen Aluminum buyout deal, Carlisle added a similar line of businesses to its portfolio by acquiring Drexel Metals, Sunlast Metal and Premium Panels. Drexel Metals was acquired last July while Sunlast Metal and Premium Panels were bought in June 2018.

In the first nine months of 2018, Carlisle spent approximately $19.5 million on acquisitions (net of cash acquired). Further, acquired assets added nearly 11.7% to sales growth in the third quarter of 2018.
Zacks Rank & Other Stocks to Consider

With a market capitalization of nearly $6.3 billion, Carlisle currently carries a Zacks Rank #2 (Buy). A diversified product portfolio, buyouts, healthy commercial construction market in the United States and restructuring initiatives will be advantageous for the company in the quarters ahead.

Currently, the Zacks Consensus Estimate for earnings is pegged at $5.61 for 2018 (results not yet released) and $6.93 for 2019, reflecting no change and growth of 0.1% from the respective tallies 60 days ago. Further, estimates for 2019 reflect year-over-year growth of 23.5%.

Carlisle Companies Incorporated Price and Consensus

Carlisle Companies Incorporated Price and Consensus | Carlisle Companies Incorporated Quote

In the past month, the company’s shares have yielded 11.1% return, outperforming the industry’s growth of 4.1%.

Some other top-ranked stocks in the industry are Hitachi, Ltd. (HTHIY - Free Report) , HC2 Holdings, Inc. (HCHC - Free Report) and Barloworld Ltd. (BRRAY - Free Report) . While Hitachi currently sports a Zacks Rank #1 (Strong Buy), HC2 Holdings and Barloworld carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Hitachi’s earnings estimates for fiscal 2019 (ending March 2019) and fiscal 2020 (ending March 2020) have improved in the past 60 days. Further, the company pulled off average positive earnings surprise of 55.51%.

HC2 Holdings’ earnings estimates remained unchanged for 2018 (results not yet released) and 2019 in the past 60 days. The company delivered positive earnings surprise of 111.90% in the last reported quarter.

Barloworld’s earnings estimates for fiscal 2019 (ending September 2019) improved in the last 60 days.

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