Shares of Snap-on Inc. (SNA) rose by a marginal 0.23% after the company on May 30 announced the all cash acquisition of New Hampshire-based brake servicing solutions provider, Pro-Cut International for about $42 million.
Pro-Cut is a designer, manufacturer and distributor of the brake servicing products including on-car brake lathes along with relevant equipment and accessories for use in the automotive repair industry. In the last fiscal, the company reported revenues of about $24 million.
The decision to acquire Pro-Cut is a strategic move by Snap-on and is a part of the company’s ongoing strategic investments to strengthen its Repair Systems & Information Group segment, which contributed about 33% of the company’s total revenue in fiscal 2013.
This segment consists of the business operations providing diagnostics equipment, vehicle service information, business management systems, electronic parts catalogs, and other solutions for vehicle service to customers in the worldwide vehicle service and repair marketplace. In the last reported quarter (first-quarter 2013), the revenues from the segment increased 6.7% year over year to $262.7 million, primarily on gains in sales of diagnostics and repair information products to repair shop owners and managers.
The acquisition of Pro-Cut perfectly complements Snap-on’s Repair Systems & Information Group segment’s business, as Pro-Cut’s advanced brake servicing product line further augments Snap-on’s offering of productivity solutions for vehicle repair facilities, including independent shops, national service chains and OEM dealerships. Snap-on has been carefully considering acquisitions to boost its business.
In the second quarter of 2013, the company had acquired Challenger Lifts that primarily designs, manufactures and distributes a comprehensive line of superior car lifts, jacks and auto lift accessories to the automotive repair sector.
Snap-on Incorporated is a global provider of professional tools, equipment, and related solutions for technicians, vehicle service centers, original equipment manufacturers (OEMs), and other industrial users.
Snap-on currently has a Zacks Rank #2 (Buy). Some other stocks that can be considered at the moment include Gorman-Rupp Co. (GRC), Emerge Energy Services LP (EMES) and Blount International Inc. (BLT). While Gorman-Rupp and Emerge Energy Services carry a Zacks Rank #1 (Strong Buy), Blount International has the same rank as Snap-on.