Machinery company Rexnord Corporation (RXN) recently announced the acquisition of the Italy-based Tollok S.p.A. The acquired assets complement the company’s existing product line, offering solid growth opportunities. The financial terms of the transaction have not been disclosed.
Tollok S.p.A, with an annual revenue generation capacity of €17 million, has a diversified customer base in the power generation as well as process and general industries. It provides shaft locking devices to control rotating shafts, manage torque transmission, and counteract shaft bending and vibration.
Rexnord, over time, had successfully leveraged its acquisitions by penetrating into unexplored markets, strengthening foothold in existing markets and expanding its product lines. In Apr 2015, Green Turtle was acquired with an aim to expand the company’s Zurn business in Toronto, Ontario and Charlotte. In first-quarter fiscal 2015, acquisitions contributed roughly 3% to the company’s revenue growth.
Rexnord is scheduled to release the second-quarter fiscal 2015 (ended Sep 2014) results on Nov 6, after the market closes. The Zacks Consensus Estimates for the quarter is currently pegged at 39 cents per share. Rexnord carries a Zacks Rank #3 (Hold) and has an Earnings ESP of 0.00%, which makes prediction of a likely earnings beat difficult. The Zacks Consensus Estimate for fiscal 2015 and 2016 are at $1.61 and $1.89, representing year-over-year growth of 20.2% and 17.4%, respectively.
Rexnord presently has a market capitalization of $3 billion. Some better-ranked stocks in the machinery industry include AO Smith Corp. (AOS), CUI Global, Inc. (CUI) and Parker-Hannifin Corp. (PH). All these stocks hold a Zacks Rank #2 (Buy).
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