Milacron Holdings Corp. MCRN recently completed the acquisition of CanGen Holdings, Inc. (CanGen), consisting of its 2 subsidiaries, Canterbury Engineering Company and Genca. The buyout is expected to help Milacron Holdings expand its product offerings into downstream tooling.
CanGen is a leading supplier of highly engineered aftermarket process control components for extrusion and injection-molding applications, with approximately $20 million in sales for 2014. The consumables product market served by Canterbury and Genca includes screws & barrels, tooling and cross-heads, and other machined metal components.
On the other hand, Milacron Holdings’ extrusion business consists of Original equipment manufacturer (OEM) machines, barrel & screw rebuild and repair, gearbox repair and extrusion service and parts. Post completion of the deal, CanGen’s subsidiaries will be part of the Milacron Extrusion’s product portfolio.
On Nov 6, Milacron Holdings inked an agreement to acquire CanGen. The acquired assets will perfectly complement Milacron Holdings’ advanced Plastic Processing Technologies (APPT) group as well as add new markets focused on rubber, recycling, medical, cross head and small profile tooling. The deal will also extend proprietary rights to over 185,000 unique designs and drawings, and a regional center for parts and services in the southeastern U.S.
Moreover, Genca holds a strong market position in Mexico and throughout South America, which will be leveraged under Milacron Holdings’ ownership. The two companies’ capabilities, coupled with their global reach, will offer much greater value to customers.
During the 9 months ended Sep 30, 2014, Milacron Holdings completed 5 acquisitions. Higher organic sales growth, cost-cutting efforts and balance sheet de-leveraging will likely ensure sustained earnings growth for the company in the future.
However, demand will continue to be affected by cyclical trends in clients’ capital expenditure, industrial production and construction activity. Further, intense competition can limit the firm’s growth, especially as it continues to look for international prospects.
Cincinnati, OH-based Milacron Holdings manufactures, distributes and services engineered and customized systems within the plastic technology and processing industry in North America, Europe, Asia, and internationally. Milacron is a global leader in the manufacture, distribution and service of highly engineered and customized systems within the plastic technology and processing industry.
Milacron Holdings currently holds a Zacks Rank #4 (Sell). Better-ranked stocks in the industrial products sector include Berry Plastics Group, Inc. BERY, Brady Corp. BRC and Codexis, Inc. CDXS. All three stocks sport a Zacks Rank #1 (Strong Buy).
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