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AMETEK (AME) Boosts Segmental Strength With Three Buyouts

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Zacks Equity Research
·3 min read
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AMETEK AME continues with its acquisition strategy to shape up its growth trajectory by expanding its Electronic Instruments Group (“EIG”) and Electromechanical Group (“EMG”) segments.

This is evident from its latest acquisitions of Magnetrol International, Crank Software and EGS Automation. AMETEK has spent $270 million on these three acquisitions.

Notably, Aurora, IL-based Magnetrol offers level and flow-control solutions for challenging process applications.

Then again, Ottawa, Canada-based Crank Software offers embedded graphical user interface (GUI) software and services.

Meanwhile, Donaueschingen, Germany-based EGS provides automation solutions used for designing and manufacturing highly-engineered and customized robotic solutions.

Magnetrol and Crank Software will be part of the EIG segment, whereas EGS will be associated with EMG.

AMETEK, Inc. Revenue (TTM)

AMETEK, Inc. Revenue (TTM)
AMETEK, Inc. Revenue (TTM)

AMETEK, Inc. revenue-ttm | AMETEK, Inc. Quote

Benefits of the Move

We note that AMETEK with Magnetrol will bolster its presence across medical, pharmaceutical, food and beverage, oil and gas, and the general industrial space. Moreover, the product portfolio of the latter is likely to strengthen AMETEK’s Sensors, Test and Calibration business.

With Crank Software, the company will expand its software solutions offerings.

Additionally, the EGS Automation buyout will strengthen AMETEK’s Dunkermotoren business. Also, it is expected to boost the latter’s presence in the medical, food and beverage, and general industrial markets.

We believe that the underlined buyouts will drive growth in both the EIG and EMG segments of AMETEK further. This, in turn, will drive the company’s top-line growth.

Wrapping Up

AMETEK is a leading manufacturer of electronic appliances and electromechanical devices.

The company continues to reap benefits from the execution of its four core growth strategies of operational excellence, global market expansion, investments in product development and acquisitions. The company’s latest move is in sync with these strategies.

Apart from the underlined acquisitions, the company has entered a definitive agreement to acquire Abaco Systems from Veritas Capital. Notably, Abaco Systems offers mission-critical embedded computing systems.

The buyout is expected to be completed by mid-2021. Post the deal completion, Abaco Systems will join AMETEK’s EIG segment.

AMETEK's increasing number of acquisitions remains a tailwind, with opportunities to further expand its product portfolio and bolster its performances in various end markets.

Zacks Rank & Other Stocks to Consider

AMETEK currently carries a Zacks Rank #3 (Hold).

Some other top-ranked stocks in the broader technology sector are NXP Semiconductors NXPI, Analog Devices ADI and Agilent Technologies A. While NXP Semiconductors sports a Zacks Rank #1 (Strong Buy), Analog Devices and Agilent Technologies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rates for NXP Semiconductors, Analog Devices and Agilent Technologies are currently pegged at 10%, 12.35% and 9%, respectively.

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