Markel Ventures, a unit of Markel Corp. (MKL), has announced that its subsidiary AMF Bakery Systems has closed the acquisition of Tromp Bakery Equipment B.V. along with its other associated entities. Netherlands-based Tromp specializes in supplying bakery items. The terms of the deal were undisclosed.
Both Markel and AMF have their hopes pinned to the addition of this new unit and look forward to better serve the combined customer base. The newly acquired company is expected to help Markel to tap the budding specialty bakery sector. The company also believes that it will be easy to integrate the newly acquired company with AMF Bakery Systems, as both have similar lines of business.
Markel has been on an acquisition spree of late. The company recently completed the acquisition IDRECO GmbH. It has undertaken several acquisitions since the beginning of this year.
Markel is striving aggressively to penetrate into the European markets. Even though the company's improving cash position supports these acquisitions, its share prices have been declining off late. Noticeably, the company’s expenses have been rising steadily, mostly due to several acquisitions.
The increasing debt level should be a matter of concern for the company. Nevertheless, Markel has a trailing 12-month interest coverage ratio of 17.29%, which is higher than the sector average of 15.28%.
Markel currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. The company competes closely with The Travelers Companies, Inc. (TRV) which is not very proactive on the acquisition front. Travelers currently retain a Zacks #3 Rank, which translates into a short-term Hold rating.
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