Universal Forest Products, Inc. (UFPI) recently announced the addition of another integrated packaging products manufacturer and distributor to its portfolio. The news sent the company’s share price up by nearly 1.98% at the end of the trading session on Jan 16.
This time, it was one of the subsidiaries of Universal Forest Products, who acquired majority interests in the Australia-based Integra Packaging Proprietary, Ltd. Financial terms of the transaction have not been disclosed.
Integra Packaging Proprietary is well known for its wood speciality packaging products as well as on-site packaging services. The company expects to generate revenues of approximately $12 million in 2015. Backed by a solid customer base and a strong management team, the acquired assets are expected to enhance Universal Forest Products’ packaging business in Australia.
In Nov 2014, Universal Forest Products acquired certain assets of Packnet, Ltd. and Bigs Packaging and Lumber, LLC for undisclosed amounts. While the Packnet acquisition enhanced the company’s industrial business in Minnesota, the acquisition of Bigs Packaging and Lumber boosted its business opportunities by allowing deeper penetration into Texas markets.
Over the long term, Universal Forest Products will gain from such acquisitions as well as 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. The company is slated to release financial results for 2014 on Feb 18, 2015.
With a market capitalization of $1 billion, Universal Forest Products carries a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include CaesarStone Sdot-Yam Ltd. (CSTE), Boise Cascade Company (BCC) and Armstrong World Industries, Inc. (AWI). While CaesarStone Sdot-Yam sports a Zacks Rank #1 (Strong Buy), both Boise Cascade and Armstrong World Industries carry a Zacks Rank #2 (Buy).
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