Nordson Corporation (NDSN) recently announced the acquisition of Dima Group B.V. for an undisclosed amount. Dima Group is a Netherland-based manufacturer of conformal coating, dispensing and surface mount technology (SMT) equipment. The transaction will have minimal impact on Nordson’s results.
Nordson believes that addition of Dima assets will strengthen its fluid dispensing equipment product line, Nordson ASYMTEK, as well as expand its reach in the global electronics assembly market. Dima will be integrated with the company’s Advanced Technology Systems segment.
Barely a month ago, Nordson acquired California-based Avalon Laboratories Holding Corp., a leading manufacturer of catheters and medical tubing products for cardiology, pulmonology and related applications. The transaction, valued at $180 million, was funded through the company’s existing credit facilities. The acquired assets are anticipated to expand Nordson’s presence in the medical markets through its fluid-management capabilities.
Such accretive acquisitions, we believe, will bode well for Nordson’s growth prospects. Also, it reflects the company’s strong cash position. Over the last three years (2011−2013), the company spent nearly $913 million for business acquisitions.
The Zacks Consensus Estimate for Nordson Corporation is pegged at $1.14 for the fourth quarter, $3.87 for fiscal 2014 and $4.40 for fiscal 2015. These estimates represent year-over-year growth of 23%, 14.4% and 13.8% respectively.
With a market capitalization of $5.2 billion, Nordson Corporation currently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the industry include DXP Enterprises, Inc. (DXPE), IDEX Corporation (IEX) and Middleby Corp. (MIDD). All these stocks hold the same rank as Nordson.
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