Premium diversified machinery manufacturer, Middleby Corporation (MIDD), in sync with its inorganic growth strategy, recently acquired the assets of a prominent deck oven manufacturer, Marsal & Sons, Inc. The company’s share price climbed 3.1% on the acquisition news, which came on Feb 10, 2014. Considering investors’ positive reaction toward the deal, we expect the acquisition to reinforce Middleby’s brand and financial position in the near future.
The Lindenhurst, New York-based Marsal & Sons, Inc. holds a high brand worth in the deck oven manufacturing market. Since 1969, the company has been enjoying global popularity for its wide range of innovative products such as hearth bake, modernized pizza-refrigerating systems and brick-fired ovens.
Middleby aspires to become the biggest business entity of the global foodservice equipment industry. As a step toward this aim, the acquisition would help the company strengthen its product portfolio, technological expertise and brand status. Hence, the deal is synergic to Middleby’s existing business strategy. Furthermore, the acquired property, by bringing on board approximate revenues of $5 million in the upcoming quarter, is expected to improve Middleby’s top line as well.
In the last reported quarter, the company’s adjusted earnings surpassed the year-ago tally by 43.8% and the Zacks Consensus Estimate by 22.1%. With year-over-year revenue growth of 12.3%, the company has maintained a strong outlook for upcoming earnings. Such lucrative acquisition deals are expected to further boost the solid guidance.
With a market capitalization of $5.88 billion, Middleby currently holds a Zacks Rank #2 (Buy). Some better-ranked stocks in the industry include Kadant Inc. (KAI), Advanced Emissions Solutions, Inc. (ADES) and Briggs & Stratton Corp. (BGG). All three stocks carry the same Zacks Rank as Middleby.
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
Be the first to comment