Ingersoll-Rand plc (IR) recently completed the acquisition of the assets of Cameron International Corporation’s (CAM) Centrifugal Compression division for $850 million.
Ingersoll’s compressed air systems and services business provides a wide range of centrifugal, reciprocating and rotary air compressor products and this acquisition will further expand its existing portfolio. Post acquisition, the Turbo-Air and MSG brands of Cameron International’s Centrifugal Compression division will be added to Ingersoll’s line-up and boost its compression unit offerings.
Ingersoll expects to achieve steady improvements in operating profitability by consistently investing in new products and technologies. The transaction will expand Ingersoll’s industrial segment into areas such as air separation, petrochemical, chemical, and process gas and fast-growing power generation applications.
This acquisition is a strategic fit for the company and is likely to be accretive to its earnings. We believe that such opportunistic acquisitions would serve as growth drivers, supplementing the company’s organic growth.
Ingersoll is a globally diversified industrial company, which designs, manufactures and sells a range of industrial and commercial products and services. It provides energy-efficient solutions, residential solutions, technology and security-related services both in the domestic and international markets. The geographic and industrial diversity coupled with a large installed product base provides ample growth opportunities for the company within service, spare parts and replacement revenue streams.
Ingersoll currently has a Zacks Rank #2 (Buy). Other stocks that look promising and are worth a look in the industry include Blount International Inc (BLT) and Middleby Corp (MIDD), both carrying a Zacks Rank #1 (Strong Buy).
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