The Middleby Corporation (MIDD) recently acquired the commercial refrigeration and foodservice products business of Gurgaon, India-based Celfrost Innovations Pvt. Ltd. The terms of the deal were not disclosed.
The acquisition was carried out by the company’s new Indian unit, Middleby Commercial Food Innovations Pvt. Ltd. With annual sales of roughly $20 million, Celfrost provides various cooling and kitchen appliances. The company’s products range from deep freezers, minibars, coldrooms, water coolers, ice machines and flakers, professional coffee machines to blenders and mixers, oven, commercial dishwashers and cold dispensers. The products are used in various industries including restaurants, bars, coffee shops, hotels, ice cream & beverage, bakeries, food retail and the healthcare segments.
Established in 2004, Celfrost works with the concept of providing its customers the ‘touch and feel’ experience. In view of the same, the company has already established 15 brand centers across India with plans for further expansion. Celfrost has reduced costs by manufacturing products at large scale factories, thereby allowing it to invest more in research and development and technological advancements.
The acquisition of Celfrost’s refrigeration unit complements Middleby’s warming and cooking equipment segment. Middleby aims to tap the growing Indian market while establishing its products. Additionally, the company plans to expand Celfrost’s product offerings in other emerging markets to gain higher market share.
Middleby has been growing inorganically for the past few quarters. In the past twelve months, Middleby acquired Viking, Nieco and Stewart Systems. These acquisitions contributed roughly $76.1 million or 29.3% of the revenue growth in the second quarter of 2013. With the addition of Celfrost, we expect the company to grow further inorganically.
Middleby currently carries a Zacks Rank #3 (Hold). Other stocks worth a look in the industry include Manitex International, Inc. (MNTX), Colfax Corporation (CFX) and Dover Corporation (DOV). While Manitex International carries a Zacks Rank #1 (Strong Buy), Colfax Corp. and Dover Corp. carry a Zacks Rank #2 (Buy).
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