Worthington Industries, Inc. (WOR) recently acquired leading atmospheric tanks and pressure vessels maker Westerman Companies for $70 million. The purchase price includes payment of Westerman debt (roughly $6 million). The acquired entity will be integrated into the Ohio-based metal processor’s Pressure Cylinders division.
Westerman, which reported annual sales of $71.8 million, supplies tanks and pressure vessels for the global energy and marine markets. Its energy products are used for a vast range of exploration, recovery and production purposes across oil and gas and nuclear markets. Moreover, the company’s marine products have application in shipyard lift systems for large, sea-going vessels.
Westerman is the biggest producer of enriched uranium hexafluoride storage and transportation cylinders for the global nuclear industry. It has a broad customer base including companies engaged in the drilling of the Utica and Marcellus shale formations.
Worthington, which has made a string of acquisitions over the last few years, said that the Westerman acquisition augurs well with its growth strategy as it broadens its footprint in the global energy and alternative fuels markets and offers an opportunity to diversify in the marine and industrial space. The acquisition also expands its product offering and market reach.
Worthington, which has annual revenues of roughly $2.5 billion, is engaged in processing steel for application in the automotive, construction, hardware, agricultural, aerospace and other industries. The company makes a range of processed steel items, pressure cylinders (including oxygen and helium tanks and hand torches), metal framing products, racks, shipping pallets, airbrake tanks and consumer products.
Worthington reported strong fourth-quarter fiscal 2012 results (ended May 31) on June 28 with adjusted earnings of 77 cents per share crushing the Zacks Consensus Estimate of 54 cents. Revenues increased 12% year over year to $755.4 million on the heels of a higher average selling price, increased volume and synergies of acquisitions.
Worthington hopes to continue its earnings momentum moving ahead. The company expects the economy to improve slowly and its core businesses to benefit from its growth strategies, which include acquisitions and expansion in product lines and markets. However, the construction market may remain soft due to tight government spending.
Worthington, which competes with AK Steel Holding Corporation (AKS), among others, retains a short-term Zacks #3 Rank (Hold).
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