Airgas, Inc. (ARG) has entered into an agreement to acquire the assets and operations of The Encompass Gas Group, Inc. Financial terms of the agreement were not disclosed. Subject to customary closing conditions, the acquisition is expected to be completed on Nov 1, 2013.
Headquartered in Rockford, Encompass is one of the largest privately owned suppliers of industrial, medical, and specialty gases and related hardgoods in the U.S. Encompass offers bulk gas and micro bulk systems as well as fully integrated pipeline system packages. It operates in eleven locations and has more than 130 employees in Illinois, Wisconsin and Iowa.
The acquisition will help in the development of the quality of service and breadth of product offering of both companies. Encompass’ wide range of services and commitment toward branch and product development will also help in attaining the needs of a diverse customer base.
Airgas has grown through acquisitions and has set a target of $150 million in acquired sales for fiscal 2014. The company remains optimistic about reaching its target on the back of a strong pipeline. Airgas is optimistic about the long-term prospects of the U.S. manufacturing and energy industries and non-residential construction.
Airgas recently announced the reorganization of its Southwest distribution region in two divisions – the Gulf Coast region and the Southwest region. The reorganization underscores Airgas' commitment to an operating model made for customers' satisfaction and fulfillment of their needs.
Airgas’ strong brand identity, size and scale advantage, an extensive U.S. distribution network and a diverse customer base position the company for sustainable long-term growth. Furthermore, renewed focus on day-to-day selling, share buybacks and SAP implementation will provide a solid tailwind going forward.
Based in Pennsylvania, Airgas, through its subsidiaries, distributes industrial, medical and specialty gases as well as hardgoods in the U.S. The company also markets its products and services through e-business, catalog and telesales channels.
Airgas currently carries a short-term Zacks Rank #3 (Hold).
Other chemical stocks that are worth a look include L'Air Liquide SA (AIQUY), Air Products & Chemicals Inc. (APD) and BASF SE (BASFY). All these hold a Zacks Rank #2 (Buy).