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Blackstone Acquires Gates Corporation for $5.4 Billion

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New York-based investment manager, The Blackstone Group L.P. (BX), recently closed a deal to acquire Gates Corporation for $5.4 billion. Gates Corporation is a leading industrial and manufacturing company based in Denver, Colorado.

Gates Corporation was previously acquired by equity investment firms – Onex Corp and the Canada Pension Plan Investment Board (:CPPIB) in 2010. Further, in Apr 2014, Blackstone struck a deal with these firms to acquire Gates Corporation.

Gates Corporation caters to a diverse range of industries such as oil and gas, energy, mining, marine, agriculture, transportation and automotive. Thus, given the wide arena of economy it serves, the company was an attractive investment opportunity for Blackstone.

Blackstone boasts a growth trajectory driven by meaningful acquisitions. The past takeovers of GSO Capital Partners, Harbourmaster, Vivent Inc, Capital Trust and Strategic Partners have not only expanded the company’s global foothold but also boosted its asset management and servicing potential.

Similarly, we expect that the latest deal too, will support Blackstone’s top-line growth in the forthcoming quarters. Moreover, given the company’s strong balance sheet position, we foresee continued inorganic growth plans in the future.

Blackstone currently carries a Zacks Rank #3 (Hold). Some better-ranked investment managers include Kohlberg Kravis Roberts & Co. (KKR), Noah Holdings Limited (NOAH) and Woori Finance Holdings Co., Ltd. (WF). All these stocks sport a Zacks Rank #1 (Strong Buy).

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