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Badger Meter (BMI) to Acquire Innovative Metering Solutions

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Badger Meter, Inc. BMI has signed an agreement to acquire Tampa, FL-based Innovative Metering Solutions (“IMS”). This buyout will help serve Badger Meter serve its utility customers in the southeastern United States.


Innovative Metering Solutions is the exclusive stocking distributor for Badger Meter's utility products in Florida. The company offers a wide collection of residential as well as commercial water meters and metering systems to provide a custom-made solution that help cater the unique requirement of each utility.


IMS will now operate as “National Meter & Automation,” Badger Meter’s wholly-owned distribution sales organization.


Acquisitions to Propel Growth


During second-quarter 2017, Badger Meter acquired D-Flow Technology. The acquisition will enhance its successful E-Series Ultrasonic product line, lower production costs and provide a platform for the advancement of ultrasonic capabilities. The company also bought the assets of Carolina Meter & Supply in November 2017. The buyout will help the company boost sales while providing technical and operational support to the customers.


Strong Demand for E-Series Meters Bodes Well 


Badger Meter is poised to gain from the growing demand of E-Series meters and ORION cellular endpoints as well as BEACON Advanced Metering Analytics (“AMA”) managed solution in near future. The company will also benefit from the integration of technology of D-Flow into E-series meters. Further, the introduction of the next version of E-series meters in the second half of 2018 will drive Badger Meter’s growth through product improvement and cost reduction.


Gains From Tax Reform


Badger Meter expects that the tax reform will be highly beneficial over the long term. It also believes that the tax law will have a positive impact on the bottom line in 2018. It anticipates that the effective tax rate to drop to 24% in 2018, from the normal range of 35-36%.


Share Price Performance



The company has outperformed the industry over the past year. Its shares rallied 29% while the industry recorded growth of 16%.


Zacks Rank & Other Stocks to Consider


Badger Meter carries a Zacks Rank #2 (Buy).


Other top-ranked stocks in the same sector are Allied Motion Technologies, Inc. AMOT, Sensata Technologies Holding PLC ST and Fortinet, Inc. FTNT. Each of the stocks carry the same rank as Badger Meter. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.


Allied Motion Technologies has a long-term earnings growth rate of 16%. Its shares rallied 85% over the past year.


Sensata Technologies has a long-term earnings growth rate of 10%. Its shares increased 24% over the past year.


Fortinet has a long-term earnings growth rate of 17%. The stock gained 39% in a year’s time.


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