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IDEX's (IEX) Flow Management Buyout to Boost Energy Business
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IDEX Corporation (IEX - Free Report) , on Feb 28, announced that it completed the acquisition of Phoenix, AZ-based Flow Management Devices, LLC. The transaction value was $125 million.
It is worth mentioning here that the buyout deal was announced by IDEX on Jan 29.
Privately-owned Flow Management Devices specializes in providing flow measurement systems, especially for customers in the oil & gas industry. The firm has manufacturing facilities in Arizona, and owns offices in Pittsburgh and Houston. It was founded in 2007 and generates $60 million in revenues globally.
Inside the Headlines
As noted, IDEX will benefit from the integration of Flow Management to its energy group, especially boosting the latter’s pump and metering systems business. Businesses from customers like pipeline operators, refineries and chemical manufacturers are expected to flourish.
It is worth noting here that IDEX’s energy group is part of the company’s Fluid & Metering Technologies segment. The energy group comprises the business of Liquid Controls, SAMPI, Corken and Toptech Systems.
In 2019, the Fluid & Metering Technologies segment accounted for 38% of IDEX’s revenues. Moreover, the energy market accounted for 17% of the Fluid & Metering Technologies segment’s sales in the year.
IDEX’s Inorganic Initiatives
The above-mentioned transaction is consistent with IDEX’s policy of acquiring meaningful businesses to gain access to improve its product lines and market exposure.
In 2018, the company’s acquisition of Phantom Controls’ intellectual property assets (in June) and Finger Lakes Instrumentation (in July) deserves a mention. Further, IDEX acquired Velcora Holding AB, with its Steridose and Roplan businesses, in July 2019. The buyout added strength to the company’s sealing solutions platform.
In fourth-quarter 2019, acquired assets positively impacted IDEX’s sales by 2%. In 2020, the buyouts are predicted to positively impact its revenues by $21 million and earnings by 3 cents per share.
Zacks Rank, Price Performance and Earnings Estimates
With a market capitalization of $11.3 billion, IDEX currently carries a Zacks Rank #4 (Sell). It faces headwinds from forex woes and challenging end markets. Also, impacts of variable compensation, tax rate and growth investments might be dragging.
In the past three months, IDEX’s shares have dipped 6.2% versus the industry’s decline of 2.8%.
The Zacks Consensus Estimate for earnings per share is pegged at $5.74 for 2020 and $6.14 for 2021, marking declines of 4.5% from the respective 60-day-ago figures. Also, estimates represent a year-over-year decline of 1% for 2020 and a dip of 6.9% for 2021.
In the past 60 days, earnings estimates for these companies have improved for the current year. Further, positive earnings surprise for the last four quarters, on average, was 0.40% for Graco, 26.60% for Tennant and 5.36% for Dover.
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IDEX's (IEX) Flow Management Buyout to Boost Energy Business
IDEX Corporation (IEX - Free Report) , on Feb 28, announced that it completed the acquisition of Phoenix, AZ-based Flow Management Devices, LLC. The transaction value was $125 million.
It is worth mentioning here that the buyout deal was announced by IDEX on Jan 29.
Privately-owned Flow Management Devices specializes in providing flow measurement systems, especially for customers in the oil & gas industry. The firm has manufacturing facilities in Arizona, and owns offices in Pittsburgh and Houston. It was founded in 2007 and generates $60 million in revenues globally.
Inside the Headlines
As noted, IDEX will benefit from the integration of Flow Management to its energy group, especially boosting the latter’s pump and metering systems business. Businesses from customers like pipeline operators, refineries and chemical manufacturers are expected to flourish.
It is worth noting here that IDEX’s energy group is part of the company’s Fluid & Metering Technologies segment. The energy group comprises the business of Liquid Controls, SAMPI, Corken and Toptech Systems.
In 2019, the Fluid & Metering Technologies segment accounted for 38% of IDEX’s revenues. Moreover, the energy market accounted for 17% of the Fluid & Metering Technologies segment’s sales in the year.
IDEX’s Inorganic Initiatives
The above-mentioned transaction is consistent with IDEX’s policy of acquiring meaningful businesses to gain access to improve its product lines and market exposure.
In 2018, the company’s acquisition of Phantom Controls’ intellectual property assets (in June) and Finger Lakes Instrumentation (in July) deserves a mention. Further, IDEX acquired Velcora Holding AB, with its Steridose and Roplan businesses, in July 2019. The buyout added strength to the company’s sealing solutions platform.
In fourth-quarter 2019, acquired assets positively impacted IDEX’s sales by 2%. In 2020, the buyouts are predicted to positively impact its revenues by $21 million and earnings by 3 cents per share.
Zacks Rank, Price Performance and Earnings Estimates
With a market capitalization of $11.3 billion, IDEX currently carries a Zacks Rank #4 (Sell). It faces headwinds from forex woes and challenging end markets. Also, impacts of variable compensation, tax rate and growth investments might be dragging.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past three months, IDEX’s shares have dipped 6.2% versus the industry’s decline of 2.8%.
The Zacks Consensus Estimate for earnings per share is pegged at $5.74 for 2020 and $6.14 for 2021, marking declines of 4.5% from the respective 60-day-ago figures. Also, estimates represent a year-over-year decline of 1% for 2020 and a dip of 6.9% for 2021.
IDEX Corporation Price and Consensus
IDEX Corporation price-consensus-chart | IDEX Corporation Quote
Stocks to Consider
Some better-ranked stocks in the industry are Graco Inc. (GGG - Free Report) , Tennant Company (TNC - Free Report) and Dover Corporation (DOV - Free Report) . While both Graco and Tennant currently sport a Zacks Rank #1 (Strong Buy), Dover carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, earnings estimates for these companies have improved for the current year. Further, positive earnings surprise for the last four quarters, on average, was 0.40% for Graco, 26.60% for Tennant and 5.36% for Dover.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>