Colfax Corporation (CFX) to Acquire Siemens' STE Business
Colfax Corporation CFX signed a binding agreement to acquire Siemens AG’s Siemens Turbomachinery Equipment GmbH (STE) business, with a cash consideration of around €195 million. The move would enhance Colfax’s product portfolio as well as boost its position in the global industrial and environmental marketplaces.
Over the last six months, shares of this Zacks Rank #2 (Buy) stock yielded a return of 32.84% – outperforming 22.62% gain provided by the Zacks categorized Machinery-General Industrial industry.
Inside the headlines
STE develops, manufactures and distributes miniature steam turbines as well as singular-stage compressors, used in industrial and environmental applications. In fiscal 2016 (ended Sep, 2016), the company generated revenues worth €146 million.
The strategic buyout of STE would reinforce Colfax’s Howden trading platform. This deal would widen Howden’s compression solutions’ range.
The transaction is subject to regulatory approvals and customary closing conditions.
Why Should You Grab the Stock?
Colfax presently carries a Zacks Rank #2. Acquisitions have been the company’s preferred mode of expansion. Its acquired assets contributed roughly 1.3% to year-over-year sales growth in 2016. The company displays solid growth potential on the back of its diversified product portfolio and exposure to emerging markets.
Stocks to Consider
Other favorably placed stocks in the industry are listed below:
ACCO Brands Corporation ACCO has a positive average earnings surprise of 24.74% for the last four quarters and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial Technologies, Inc. AIT carries a Zacks Rank #2 and has a positive average earnings surprise of 6.18% for the trailing four quarters.
Avery Dennison Corporation AVY also holds a Zacks Rank #2 and has an average earnings surprise of 6.17% for the past four quarters.
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