Colfax Corporation (CFX), a manufacturing and engineering company, recently announced to have signed an agreement to acquire the Global Infrastructure and Industry (GII) business of Flakt Woods Group. The completion is subject to closing conditions.
Assuming debt, Colfax has valued GII at €193 million. The acquired business has strong international presence and is well known as a supplier of industrial fans and related products. Acquisition of GII will strengthen the company’s Howden business through its broad product portfolio and large customer base and will add revenue generation capacity of approximately $225 million.
Colfax’s Howden was founded in 1854 and currently provides precision air and gas handling equipment for challenging applications. Its products are supplied to various industries including power generation, oil and gas, petrochemical, mining and steel.
Colfax, over time, has made a number of strategic acquisitions that proved beneficial for the company. Among these, the acquisition of Charter in January 2012 deserves special mention. The transaction added world class welding, cutting and automation and air and gas handling business to Colfax’s portfolio and enabled the company to grow its businesses in emerging markets.
Post the Charter acquisition, Colfax made three more strategic acquisitions that helped the company expand its operations. This included acquisition of majority ownership in CJSC Sibes in May 2012, acquisition of Co-Vent Group Inc. in September 2012, and 91% stake in Soldex S.A. in October 2012.
Besides these acquisitions, a little glimpse into the second quarter 2013 results shows that the company is financially sound for more accretive acquisitions going forward.
Exiting the second quarter of 2013, Colfax’s cash and cash equivalents stood at $587.9 million, more than double on a sequential basis. Cash generated from operating activities were $99.1 million, signifying a major improvement from cash use of $13.4 million in the first quarter 2013.
Colfax currently has a market capitalization of $5.5 billion and holds a Zacks Rank #3 (Hold). Other companies to look out for are Gorman-Rupp Co. (GRC) and Graham Corp. (GHM), each carrying a Zacks Rank #1 (Strong Buy) while DXP Enterprises, Inc. (DXPE) holds a Zacks Rank #2 (Buy).
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