thats two this week....small, but logical and cheap seems to be the rule lately. Pretty smart IMO to grab some of these smaller pieces while times are rough. There are tons of these little companies which can be bought for pennies on the dollar, and management usually stays in place.Heading more and more toward a near monopoly on commercial kitchens. Thanks for the info on the grilled chicken at KFC-been wondering about that. Does that mean a new piece of equipment was purchased for every location? How about Quizno's talking sub heater, is that a MIDD product also? Earnings surprise? Hell yeah! R
ess Release Source: The Middleby Corporation The Middleby Corporation Completes Acquisition of Anetsberger Brothers, Inc. On Thursday April 30, 2009, 5:05 pm EDT Buzz up! Print Related:Middleby Corp. ELGIN, Ill.--(BUSINESS WIRE)--The Middleby Corporation (NASDAQ: MIDD - News) today announced it has acquired substantially all of the assets of Anetsberger Brothers, Inc. (“Anets”), a leading manufacturer of griddles, fryers, and dough rollers for the commercial foodservice industry with approximately $10 million in annual sales. The purchase price for the acquisition was $3.5 million plus $0.5 million in deferred payments if certain performance criteria are met. The transaction will be financed under Middleby’s senior revolving credit facility. The acquisition of Anets allows Middleby to continue to expand its portfolio of leading brands in cooking and warming and increase its market penetration in the griddle and fryer segment.
Related Quotes Symbol Price Change MIDD 44.80 +1.03
Selim A. Bassoul, Middleby Chairman and Chief Executive Officer, said, “We are very pleased to announce the Anets acquisition. Anets is a well recognized brand, with a strong presence in the midwest. This acquisition allows us to continue to strengthen our leadership position in the fryer and counterline cooking segments and add to our portfolio of leading chain restaurant customers. Additionally, we believe there are measurable synergies that can be achieved with this acquisition.”
Whilst the company is making acquistions, they are small and not of sufficient size to drive earnings required for the future. The timing of these is interesting...just before the Q1 announcement. I would focus on earnings but, also on sales -especially organic growth- when the q1 numbers come out.
When the KFC oven programme is over I wonder what organic sales will look like? THe overall market is clearly still in a decline according to earlier posts.
MIDD is buying them for 35% of sales. Given any reasonable profit margin--and we know MIDD's history on improving profit margins of acquirees--Anets should be accretive this year. If you assume a 10% after-tax profit margin on $10M in sales, Anets could contribute maybe six cents in after-tax profits on an annual basis.
In the case of serial aquirors like MIDD, the concept of "organic growth" gets pretty muddy, but as long as they buy these companies at a good price and make them perform, it doesn't matter. They are making the right moves in a fragmented industry, I think, certainly better than MTW's Enodis move!
Crazy buying spree! seems like they paid a cheaper price relative to sales than for cooktek. Looks as though middleby is really preparing themselves for 3-5 years down the road. Shares are a steal at this price. This is one of those stocks that will return 15-20% for the next decade!