Premium industrial goods company Kaman Corporation KAMN recently announced that its aerospace division, Kaman Aerosystems, has acquired the renowned German designer and manufacturer of super-precision mini-ball bearings, GRW Bearing GmbH (‘‘GRW’’). Citizens bank is acting as the primary financial advisor of the entire transaction, valued at €135.2 million.
GRW’s mini-ball bearings have unique operating capabilities as well as distinctive engineering design. These bearings are widely used in machines that work in extreme temperatures, involve ultra-high speeds and require low noise. The company expects to earn almost €48 million from sale of these bearings at the end of 2015.
The acquisition of GRW is projected to be accretive to Kaman’s earnings per share in 2016. Moreover, the transaction will likely boost the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) by two to three times. Also, the integration of GRW would serve to fortify Kaman’s specialty bearing and engineered product category, and thereby helping it tap the growing demand from original equipment manufacturing customers.
Moving Forward
Kaman Corporation manufactures and sells different types of aerospace and defense products in the global industrial goods market. With a high brand value, the firm is regarded as the largest supplier of integrated aerostructural components, offering diversified aerostructure solutions for designing, tooling, supporting, manufacturing and testing. We believe the above-mentioned acquisition would not only help increase the company’s revenues but also assist in making its operational activities more efficient in the near future.
Stocks to Consider
Kaman Corporation currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include Belden Inc. BDC, Energy Recovery, Inc. ERII and John Bean Technologies Corporation JBT. All three stocks hold a Zacks Rank #2 (Buy).
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