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Trimble Strengthens Forestry Division With 3LOG Acquisition

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Trimble Inc. (TRMB - Free Report) is striving to expand the forestry division on the back of its strong solutions portfolio.

This is evident from the company’s latest acquisition of Richmond, British Columbia-based timber management software solutions provider — 3LOG Systems.

Notably, 3LOG offers enterprise software with integrated mobile field applications via its software solutions to timber management, wood product and bio-energy companies. The solutions facilitate management of numerous annual supply chain transactions.

The buyout will expand Trimble’s Connected Forest solutions portfolio and enhance its forestry business software offerings.

Further, 3LOG’s wide range of customers will expand Trimble’s customer base, which is expected to drive the top line.

Increasing Strength in Forestry

The Connected Forest solutions help in forest management and timber processing. The solutions handle the full raw materials lifecycle that include planning, planting, growing, harvesting, transporting and processing finished wood products.

Courtesy of 3LOG’s solutions portfolio, Trimble is well poised to serve the industry better through an advanced and comprehensive forestry supply chain software portfolio.

Apart from the latest initiative, the company introduced Connected Forest Xchange and Connected Forest Business Software-as-a-Service (SaaS) solutions to bolster the Connected Forest portfolio.

These solutions enable forestry companies to automate collection and share real-time data, which boosts efficiency and productivity. It also helps forestry companies to settle financial transactions.

All these factors position Trimble to rapidly foray into the global forestry software market that is expected to witness a CAGR of 22% over a period of 2017-2021, per a report by Technavio.

Trimble Inc. Revenue (TTM)

 

Trimble Inc. Revenue (TTM)

Trimble Inc. revenue-ttm | Trimble Inc. Quote

 

Portfolio Strength: Key Catalyst

The recent acquisition is in line with the company’s efforts to expand its overall product portfolio.

Apart from forestry initiatives, Trimble recently rolled out a Contract Maintenance module to fortify its transportation solutions portfolio. Further, it unveiled Farmer Core — a software which aids in automatic synchronization among guidance lines, field names, boundaries, landmarks and operator information — to expand footprint in the agriculture sector.

Additionally, the introduction of Global Navigation Satellite System software library, Trimble RTX Auto, reflects the company’s efforts to bolster its presence in the automobile industry.

All these initiatives are expected to drive its business in the near and the long term.

However, higher support spending related to Trimble’s customer migration to ELD software is hurting the margins in the particular segment. Moreover, the company expects customer support cost to increase in the upcoming quarter, which is a headwind. Further, U.S.-China trade tensions are overhangs.

Zacks Rank & Stocks to Consider

Currently, Trimble carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader technology sector are KLA-Tencor (KLAC - Free Report) , Agilent Technologies (A - Free Report) and Garmin (GRMN - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term expected earnings growth rate for KLA-Tencor, Agilent and Garmin is currently pegged at 13.28%, 11.75% and 7.35%, respectively.

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