Universal Forest Products, Inc. (UFPI) recently announced the acquisition of certain assets of Bigs Packaging and Lumber, LLC, a specialist in manufacturing industrial wood and packaging solutions, for an undisclosed amount. The company’s share price has gained 0.14% since Nov 13.
As announced, the transaction was carried out by Universal Forest Products’ subsidiary, UFP Western Division, Inc.
Bigs Packaging and Lumber generated $50 million in revenues in 2013. With solid revenue generation capabilities and a strong management team, the acquired assets are expected to enhance the company’s industrial portfolio, and will likely enable it to penetrate deeper into the industrial markets of Texas.
Universal Forest Products had acquired certain assets of NC-based High Level Components, LLC in April this year, while purchasing a 50% stake in Upshur Forest Products, LLC and certain assets of Container Systems, Inc. in March. In addition, National Fiber was acquired in January.
Over the long term, we believe Universal Forest Products will gain from such accretive acquisitions and addition of new customers and products to its portfolio. The company aims to generate $3 billion in revenues with operating margins at normal historical levels by 2017.
The Zacks Consensus Estimate for Universal Forest Products is pegged at $2.85 for 2014 and $3.43 for 2015. These estimates represent year-over-year growth of 34.4% for 2014 and 20.4% for 2015.
With a market capitalization of $991.5 million, Universal Forest Products carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Boise Cascade Co. (BCC), CaesarStone Sdot-Yam Ltd. (CSTE) and Apogee Enterprises, Inc. (APOG). While Boise Cascade and CaesarStone Sdot-Yam sport a Zacks Rank #1 (Strong Buy), Apogee Enterprises holds a Zacks Rank #2 (Buy).
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