Nordson Corporation (NDSN) acquired the California-based Avalon Laboratories Holding Corp., to expand presence in the medical markets through its fluid-management capabilities. Avalon Laboratories is a leading manufacturer of catheters and medical tubing products for cardiology, pulmonology and related applications. The acquisition, valued at $180 million, was funded through the company’s existing credit facilities.
The acquisition is expected to be accretive to Nordson’s earnings from its first full year of operation. Avalon Laboratories complements Nordson’s existing lines of highly engineered, single-use plastic components, used for fluid management in medical applications. Founded in 1990, Avalon Laboratories is well known for its proprietary Polymer Solution Casting manufacturing technology which enables production of seamless one-piece tubing in complex geometric designs having varying wall thicknesses.
Avalon Laboratories will presently operate as part of Nordson’s Advanced Technology Systems segment. The company has two facilities located at California and Mexico. All 400 employees of Avalon laboratories will now work under Nordson Corporation.
Nordson is expected to disclose more details about the acquisition when it releases its fiscal third-quarter 2014 (ended Jul 31, 2014) on Aug 21. The Zacks Consensus Estimate for the same stands at $1.13 per share, reflecting a year over year hike of 13.8%.
With a market capitalization of $4.9 billion, Nordson holds a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Blount International Inc. (BLT), DXP Enterprises, Inc. (DXPE) and IDEX Corporation (IEX). While Blount International sports a Zacks Rank #1 (Strong Buy), DXP Enterprises and IDEX Corporation hold a Zacks Rank #2 (Buy).
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