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EMCOR Buys Batchelor & Kimball, Fortifies Mechanical Unit
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EMCOR Group, Inc. (EME - Free Report) completed the acquisition of Batchelor & Kimball, Inc. (“BKI”) in an all cash transaction. The buyout has enabled the company to strengthen its position in mechanical construction and maintenance services. Also, it is likely to expand the company’s capabilities across the South and Southeast regions.
Benefits From BKI
BKI, now a part of EMCOR’s U.S. Mechanical Construction and Facilities Services segment, is a leading full-service provider of mechanical construction and maintenance services.
BKI has a record of designing, installing, constructing and maintaining the heating, ventilation, and air conditioning (HVAC) and plumbing systems in a number of projects for hospitals, laboratories, data centers, schools, airports as well as office buildings.
Courtesy of its best-in-class execution, deep operational and field-level expertise as well as leading safety record, BKI is expected to contribute revenues of approximately $400 million with nominal EPS accretion in 2020.
Expansion Efforts to Drive Revenues
EMCOR follows a systematic acquisition strategy that is directed toward buying small private firms with proven management and expansion potential. Markedly, the acquisition of three companies in first-half 2019 strengthened overall results by adding new markets, opportunities and capabilities. In the third quarter, acquisitions generated incremental revenues of $75.6 million. Particularly, in the U.S. Mechanical Construction segment (accounting for 35% of third-quarter 2019 revenues), acquisitions contributed $4.7 million to revenues.
During the third quarter, the U.S. Construction segment delivered robust revenue performance. Revenues in the segment increased 14.3% year over year, with organic growth of 10.4%.
Moreover, in 2018, it had acquired four companies that expanded its capabilities and geographical presence. These buyouts increased its mechanical services presence in the Mid-Atlantic and California, built leading positions in building controls in the New York City market and enabled the company to enter the important North Texas electrical construction market.
Price Performance
Owing to major contribution from U.S. Mechanical and Electrical Construction segments, shares of EMCOR have gained 51.7% year to date compared with the industry’s rally of 27%.
The company’s performance is backed by an impressive earnings surprise history. EMCOR’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 10.2%. Along with robust performance and accretive acquisitions, EMCOR’s management is optimistic about gaining from prospects in the future.
Some better-ranked stocks in the Zacks Construction Sector include Orion Group Holdings, Inc (ORN - Free Report) , North American Construction Group Ltd (NOA - Free Report) and Sterling Construction Company, Inc (STRL - Free Report) , each sporting a Zack Rank #1.
Orions’ current year earnings are expected to rise 29.7%.
North American’s earnings surpassed estimates in the trailing four quarters, the average being 8.5%.
Sterling’s 2019 earnings are expected to rise 30.1%.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time. See 8 breakthrough stocks now>>
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EMCOR Buys Batchelor & Kimball, Fortifies Mechanical Unit
EMCOR Group, Inc. (EME - Free Report) completed the acquisition of Batchelor & Kimball, Inc. (“BKI”) in an all cash transaction. The buyout has enabled the company to strengthen its position in mechanical construction and maintenance services. Also, it is likely to expand the company’s capabilities across the South and Southeast regions.
Benefits From BKI
BKI, now a part of EMCOR’s U.S. Mechanical Construction and Facilities Services segment, is a leading full-service provider of mechanical construction and maintenance services.
BKI has a record of designing, installing, constructing and maintaining the heating, ventilation, and air conditioning (HVAC) and plumbing systems in a number of projects for hospitals, laboratories, data centers, schools, airports as well as office buildings.
Courtesy of its best-in-class execution, deep operational and field-level expertise as well as leading safety record, BKI is expected to contribute revenues of approximately $400 million with nominal EPS accretion in 2020.
Expansion Efforts to Drive Revenues
EMCOR follows a systematic acquisition strategy that is directed toward buying small private firms with proven management and expansion potential. Markedly, the acquisition of three companies in first-half 2019 strengthened overall results by adding new markets, opportunities and capabilities. In the third quarter, acquisitions generated incremental revenues of $75.6 million. Particularly, in the U.S. Mechanical Construction segment (accounting for 35% of third-quarter 2019 revenues), acquisitions contributed $4.7 million to revenues.
During the third quarter, the U.S. Construction segment delivered robust revenue performance. Revenues in the segment increased 14.3% year over year, with organic growth of 10.4%.
Moreover, in 2018, it had acquired four companies that expanded its capabilities and geographical presence. These buyouts increased its mechanical services presence in the Mid-Atlantic and California, built leading positions in building controls in the New York City market and enabled the company to enter the important North Texas electrical construction market.
Price Performance
Owing to major contribution from U.S. Mechanical and Electrical Construction segments, shares of EMCOR have gained 51.7% year to date compared with the industry’s rally of 27%.
The company’s performance is backed by an impressive earnings surprise history. EMCOR’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average being 10.2%. Along with robust performance and accretive acquisitions, EMCOR’s management is optimistic about gaining from prospects in the future.
Zacks Rank and Key Picks
EMCOR (EME - Free Report) currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Construction Sector include Orion Group Holdings, Inc (ORN - Free Report) , North American Construction Group Ltd (NOA - Free Report) and Sterling Construction Company, Inc (STRL - Free Report) , each sporting a Zack Rank #1.
Orions’ current year earnings are expected to rise 29.7%.
North American’s earnings surpassed estimates in the trailing four quarters, the average being 8.5%.
Sterling’s 2019 earnings are expected to rise 30.1%.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>