Carlisle (CSL) to Acquire MTL & Strengthen Product Portfolio
Carlisle Companies Incorporated CSL recently announced that it has signed a definitive deal to acquire MTL Holdings (“MTL”) from the U.S. private equity firm, GreyLion Partners. The transaction value has been fixed at $410 million in cash. The latest deal is a testimony to Carlisle’s intention of becoming a pure-play building products company.
Based in Waukesha, WI, MTL is primarily engaged in manufacturing a wide range of metal building envelope solutions for use in the industrial, commercial and institutional buildings. The firm’s high-quality product offerings include pre-fabricated perimeter edge metal systems, non-insulated architectural metal wall systems, sloped roof ventilation systems and other products. Some of the most popular brands are Metal-Era, Hickman and Citadel.
MTL generated approximately $132 million in revenues for the past twelve-month period (ended February 29, 2024).
Acquisition Rationale
The acquisition is in sync with Carlisle’s Vision 2030 strategy and policy of acquiring businesses to strengthen its business and product portfolio. The inclusion of MTL’s solid pre-fabricated edge metal products portfolio, supported by its strong designing and manufacturing capabilities, will enable CSL to expand its customer offerings and boost its architectural metals business.
Management expects to generate cost synergies of about $13 million within the first three years of completion of the transaction. The acquisition is likely to be accretive by about 60 cents to the company’s adjusted earnings in the first full fiscal year.
The buyout is expected to be completed in the second quarter of 2024, conditioned on the fulfilment of certain customary closing conditions.
Zacks Rank & Price Performance
Carlisle, with a $17.7 billion market capitalization, currently flaunts a Zacks Rank #1 (Strong Buy). The company is poised to benefit from growing popularity of reroofing products, solid repair and remodel demand across the building envelope in commercial and residential markets, and synergies from buyouts. Contribution from Carlisle Operating System and effective pricing actions are other tailwinds.
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The company’s shares have gained 37.9% compared with the industry’s growth of 5.5% in the past six months.
The Zacks Consensus Estimate for CSL’s 2024 earnings has improved 8.2% over the last 60 days. It has a trailing four-quarter average earnings surprise of 7.6%.
Other Promising Stocks
Some other top-ranked companies from the same space are discussed below.
Griffon Corporation GFF presently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
It has a trailing four-quarter average earnings surprise of 42%. The Zacks Consensus Estimate for GFF’s fiscal 2024 earnings has increased 3.9% in the past 60 days. The stock has gained 75.0% in the past six months.
Vector Group Ltd VGR currently flaunts a Zacks Rank #1. It delivered a trailing four-quarter average earnings surprise of 10.2%. In the past 60 days, the consensus estimate for VGR’s 2024 earnings has inched up 0.1%.
Applied Industrial Technologies, Inc. AIT presently has a Zacks Rank of 2 (Buy). It has a trailing four-quarter average earnings surprise of 10.4%. The Zacks Consensus Estimate for AIT’s fiscal 2024 earnings has increased 1.7% in the past 60 days. The stock has gained 25.5% in the past six months.
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