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AMETEK Announces Sale of Reading Alloys Business to Kymera

Zacks Equity Research

AMETEK, Inc. AME recently entered into an agreement with Kymera International to sell the Reading Alloys business for an all-cash transaction valued at $250 million.

The deal is expected to close in first-quarter 2020, subject to customary closing conditions, including applicable regulatory approvals.

Reading Alloys, which was acquired by AMETEK in 2008, is part of its Electromechanical Group (EMG). It provides materials for mission critical applications in aerospace, defense, medical and industrial markets. The company's products include master alloys, thermal barrier coatings and titanium powders.

During the last reported quarter, the EMG segment generated $461.1 million of sales, which improved 2.3% on a year-over-year basis. The segment’s top-line growth was primarily attributed to solid organic sales improvement and positive contributions from the Pacific Design Technologies buyout.

Industry experts view the deal as part of the company’s strategy of focusing on other core areas.

AMETEK, Inc. Price and Consensus

 

AMETEK, Inc. Price and Consensus

AMETEK, Inc. price-consensus-chart | AMETEK, Inc. Quote

Share Price Performance

A glimpse of the company’s price trend shows that the stock has had an impressive run on the bourses in the past year. AMETEK has returned 47.4% compared with the industry’s 31.3% rally in the said period.

 

 

Bottom Line

AMETEK is one of the leading manufacturers of electronic appliances and electromechanical devices. Of late, the company is riding on acquisition benefits. The Forza, Telular and Spectro Scientific buyouts are driving growth in the Electronic Instruments segment. Further, positive contributions from the Pacific Design Technologies acquisition are contributing to Electromechanical segment sales. Notably, it is witnessing robust organic growth due to strong product pipeline.

We believe proper execution of core growth strategies including operational excellence, global market expansion, investments in product development and strategic acquisitions will continue to aid AMETEK’s growth.

Zacks Rank & Other Stocks to Consider

AMETEK currently carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the broader technology sector include MACOM Technology Solutions Holdings, Inc. MTSI, Itron, Inc. ITRI and Fiverr International Ltd. FVRR, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth for MACOM Technology, Itron and Fiverr is currently projected at 15%, 25% and 44.2%, respectively.

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