Universal Forest Products, Inc. (UFPI) continues with its acquisition spree, following the release of third-quarter 2014 results. Marking its second acquisition in a row, one of the subsidiaries of Universal Forest Products recently acquired 80% stake in certain assets of Packnet, Ltd.
Based in Eagan, MN, Packnet, Ltd. is a well-recognized supplier of industrial packaging and services in the region. The company was founded in 1987.
Backed by solid revenue generation capabilities and a strong management team, the acquired assets are expected to enhance Universal Forest Products’ industrial portfolio, and will likely enable it to penetrate deeper into the industrial markets of Minnesota. In addition, the company has an option of acquiring the remaining 20% stake in the assets of Packnet, Ltd. over the next three years.
Few days ago, Universal Forest Products’ subsidiary, UFP Western Division, Inc., acquired certain assets of Bigs Packaging and Lumber, LLC, a specialist in manufacturing industrial wood and packaging solutions, for an undisclosed amount. Bigs Packaging and Lumber generated $50 million in revenues in 2013.
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 currently 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 million, Universal Forest Products carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Boise Cascade Company (BCC), CaesarStone Sdot-Yam Ltd. (CSTE) and Hovnanian Enterprises Inc. (HOV). All these stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment