Machinery company, Kaman Corporation (KAMN), recently announced that it has agreed to acquire all assets of the New Jersey-based G.C. Fabrication, Inc. The news lifted market sentiments for the stock, resulting in a hike of nearly 0.82% in the share price on Jan 13.
As disclosed, the acquisition will be carried out by Kaman’s Distribution segment and is expected to close by the end of this month. However, financial terms of the transaction have not been disclosed.
G.C. Fabrication is a well recognized Schneider Electric/Square D distributor. The addition of the company to Kaman’s portfolio will enhance the latter’s Automation, Control & Energy platform by allowing deeper penetration into the New York market. Also, the deal will increase Kaman’s annual revenue generation capabilities by $20 million.
The transaction is in sync with Kaman’s policy of expanding its business operations in new and existing markets. Further, it is indicative of the company’s strong balance sheet and healthy cash position. In the nine months ended Sep 26, 2014, the company’s expenditure on acquisition of businesses (net of cash acquired) totaled $77 million, a steep increase from a meagre $20 million spent in the year-ago comparable period.
The Zacks Consensus Estimate for Kaman is currently pegged at $2.77 for 2015, representing year-over-year growth of 16.8%. Also, over the next 5 years, earnings are projected to grow by 15%. The company is slated to release fourth-quarter 2014 results on Feb 26, 2015.
With a market capitalization of $1 billion, Kaman Corporation presently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the machinery industry include Kadant Inc. (KAI), CUI Global, Inc. (CUI) and Pioneer Power Solutions, Inc. (PPSI). All these stocks carry a Zacks Rank #2 (Buy).
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