IDEX Corporation (IEX) recently announced that it will acquire CVI Melles Griot from a private equity firm, Norwest Equity Partners, for $400 million. The transaction is expected to close in the month of June, 2011.
Headquartered in Albuquerque, New Mexico, CVI designs and manufactures precision photonic solutions used in the life sciences, research, semiconductor, security and defense markets. CVI generates annual revenues of approximately $185 million.
With this acquisition, the company expects to expand its optics and photonics platform. Post acquisition CVI will integrate with IDEX’s previous acquisitions; Advanced Thin Films (AT Films) and Semrock. CVI will contribute to IDEX's earnings in the first full year after the acquisition.
Management also expects to realize strategic selling and operating synergies, which will lead to major collaboration of product design and production capabilities in key areas. Furthermore, these acquisitions will support IDEX’s growth plans and operating model.
In January 2011, the company acquired AT Films for $34.5 million. AT Films specializes in optical components and coatings for applications in the fields of scientific research, defense, aerospace, telecommunications and electronics manufacturing.
In fiscal 2008, IDEX acquired Semrock, a provider of optical filters for biotech and analytical instrumentation in the life sciences markets for $60.6 million. Both the acquisitions operate under the Health & Science Technologies (HST) segment.
The HST segment provides various precision fluidics solutions, including pumps, valves, degassing equipment, corrective tubing, fittings, and complex manifolds, as well as specialty medical equipment and devices used in life sciences.
The HST segment reported revenues of $134 million in the first quarter of fiscal 2011, a 43% increase from the year-ago quarter, benefiting from its exposure to end-markets and expanded global reach. In the near term, the company will continue to invest in its HST segment.
IDEX is a provider of applied solutions related to a broad range of pumps, flow meters and other fluidics systems and components and engineered products to customers in different markets around the world.
We are positive on IDEX’s long-term growth prospects, driven by acquisitions, primarily focusing on the Fluid & Metering Technologies and HST segments.
Encouraged by the better-than expected results of first quarter of fiscal 2011 and the upgraded fiscal 2011 guidance, we have a long-term Outperform recommendation on IDEX, supported by a Zacks #1 Rank (short-term Strong Buy rating).
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