Thermon Group Holdings, Inc. THR recently announced that it has successfully completed the acquisition of 100% equity stake of CCI Thermal Technologies Inc. (CCI Thermal) and some related real estate assets. The deal was originally announced on Oct 4.
The buyout was carried out by the company’s subsidiary specially formed for this deal. Purchase consideration of CAD$258 million and CAD$2.3 million related to working capital adjustment were paid through cash and senior secured debt. Its net leverage is estimated to be approximately 3.4x.
As previously noted, Thermon Group will likely incur acquisition-related costs of $5.5 million in fiscal 2018 (ending Mar 31, 2018).
CCI Thermal Buyout: A Boon for Thermon Group
CCI Thermal manufactures engineered heating and filtration solutions for use in the energy, petrochemical, electrical distribution, power, transit and industrial end markets. Prime North American brands include Cata-Dyne, Ruffneck, Norseman, Caloritech, 3L Filters and Fastrax. It has five facilities for manufacturing and fabrication in Canada and the United States, providing employment to nearly 375 people.
With the addition of CCI Thermal to its portfolio, Thermon Group is now anticipated to become a leader in industrial process heating platform, with addressable market worth $2.3 billion. The company will enhance engineering and technological capabilities to leverage benefits from future growth opportunities.
Thermon Group anticipates realizing annualized run-rate cost synergies of CAD$2.4 million in fiscal 2019. Also, the acquired assets are anticipated to boost operating margins, free cash flow and GAAP earnings per share in fiscal 2019.
In the last three months, Thermon Group’s shares have yielded 22.5% return, outperforming 7.6% gain of the industry.
Zacks Rank & Other Stocks to Consider
With a market capitalization of nearly $692 million, Thermon Group currently carries a Zacks Rank #2 (Buy).
Thermon Group Holdings, Inc. Price and Consensus
Thermon Group Holdings, Inc. Price and Consensus | Thermon Group Holdings, Inc. Quote
Some other stocks in the sector worth considering are KLA-Tencor Corporation KLAC, Lam Research Corporation LRCX and Applied Materials, Inc. AMAT. While both KLA-Tencor and Lam Research sports a Zacks Rank #1 (Strong Buy), Applied Materials carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
KLA-Tencor’s earnings estimates for fiscal 2018 and fiscal 2019 were revised upward in the last 60 days. Also, the company delivered an average positive earnings surprise of 6.64% for the last four quarters.
Lam Research’s average earnings surprise for the last four quarters was a positive 5.33%. Also, its earnings estimates for fiscal 2018 and fiscal 2019 improved in the last 60 days.
Applied Materials’ earnings estimates for fiscal 2018 were revised upward in the last 60 days. Also, the company pulled off an average positive earnings surprise of 2.66% over the last four quarters.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum…from stocks under $10 to ETF to option movers…from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
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