Industrial goods manufacturer Graco Inc. (GGG) recently completed the acquisition of Pennsylvania-based High Pressure Equipment company for $160 million. The strategic purchase is likely to expand Graco’s geographical presence in new markets as well as diversify its product portfolio.
High Pressure Equipment offers valves, fittings, and other flow control equipment for the Oil & Natural Gas industry and industrial research programs for universities and major business firms. The company also boasts of an engineering and production base in the U.K. The products of High Pressure Equipment are a strategic fit for Graco and will augment its position in the market.
A couple of weeks ago, Graco went on an acquisition spree when it announced the acquisition of four separate companies for an aggregate sum of $185 million. These included High Pressure Equipment, Utah-based White Knight Fluid Handling, Canada-based GeoBlaster Equipment Sales & Services Inc., and Brazil-based Multimaq-Pistolas e Equipamentos Para Pintura Ltda.
The acquisitions are expected to be accretive to Graco in the current year. Together with the Alco Valves acquisition in fourth-quarter 2014, the companies are expected to contribute about 13–15 cents per share to Graco’s overall earnings in 2015. With High Pressure Equipment now in its kitty, Graco expects the acquisition of the other three companies to complete very soon.
Headquartered in Minneapolis, MN, Graco is an industrial manufacturer that supplies technology and expertise for management of fluids in both industrial and commercial applications. Graco specializes in making fluid-handling equipment and systems, with one of its best known products being the spray gun used to apply paint to homes, businesses and cars. Its products are used in the manufacturing of a broad range of finished goods worldwide.
Graco currently has a Zacks Rank #2 (Buy). Other stocks in the industry that also look promising include The Babcock & Wilcox Company (BWC), Kadant Inc. (KAI) and Federal Signal Corp. (FSS), each carrying the same Zacks Rank as Graco.
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