Alamo Group Strikes Deal to Acquire Econ Engineering
ALG is trading near its 52-week low of $144.18 (1.0% above the low).
Summary
Alamo Group announced it is acquiring Econ Engineering, a UK-based maker of winter maintenance and road-mending equipment, for £120M, or approximately $158.7M. Econ generated approximately $88M of net sales in the fiscal year ended March 31. The deal adds a complementary municipal and highway-maintenance product line to Alamo's industrial equipment segment, which grew 12.8% in Q2. It comes as Alamo winds down its Boxer and Dixie Chopper lines, taking $7M-$10M and $15M-$20M in Q3 charges respectively, so this is a pivot toward a new growth asset rather than a bolt-on to existing brands. Shares sit near a 52-week low, and the market will want deal terms before repricing.
At the time of this announcement, ALG was trading at $145.68 on NYSE in the Manufacturing sector, with a market capitalization of approximately $1.8B. The 52-week trading range was $144.18 to $219.88. This news item was assessed with neutral market sentiment and an importance score of 8 out of 10. Source: Dow Jones Newswires.