Ingersoll-Rand Plc (IR) recently entered into an agreement to acquire the Centrifugal Compression division of Cameron International Corp. (CAM) for $850 million. The acquisition is expected to be funded by a mix of debt and cash and close by the end of this year.
Ingersoll Rand’s compressed air systems and services business provides a wide range of centrifugal, reciprocating and rotary air compressor products and this acquisition will further expand its existing portfolio. Post acquisition, the Turbo-Air and MSG brands of Cameron International’s Centrifugal Compression division will be added to Ingersoll Rand's lineup and boost its compression unit offerings.
The products are likely to expand Ingersoll Rand’s industrial segment into areas such as air separation, petrochemical, chemical, and process gas and fast-growing power generation applications. This transaction is expected to be accretive to Ingersoll Rand earnings per share (EPS), earnings before interest, taxes depreciation and amortization (EBITDA) margins and return on invested capital (ROIC) in 2015.
Headquartered in Dublin, Ireland, Ingersoll Rand designs, manufactures, sells and services a diverse portfolio of industrial and commercial products across the globe. The company has a solid foundation of global brands and has leading market share in all major product lines. The geographic and industrial diversity coupled with a large installed product base provides ample growth opportunities for the company within service, spare parts and replacement revenue streams.
Ingersoll Rand currently has a Zacks Rank #2 (Buy). Other stocks that look promising and are worth considering in the industry include Blount International Inc (BLT), carrying a Zacks Rank #1 (Strong Buy) and Middleby Corp. (MIDD), carrying a Zacks Rank #2 (Buy).
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