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Carlisle (CSL) Acquires Henry, Strengthens Construction Business

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·3 min read
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Carlisle Companies Incorporated CSL recently completed the acquisition of Henry Company from the affiliates of the U.S.-based private equity firm, American Securities LLC. The transaction was valued at $1.575 billion in cash.

Carlisle’s shares declined 0.8% yesterday to eventually close the trading session at $209.15.

Headquartered in California, Henry is engaged in providing building envelope systems that are used for controlling energy, vapor, water and airflow in a building. It serves customers across the repair, restoration and construction segment of residential, commercial and light commercial end markets.

Buyout Details

Henry will be integrated into the Carlisle Construction Materials segment. The segment is engaged in providing roofing and waterproofing products for commercial and industrial buildings. Revenues from the segment accounted for 79.6% of Carlisle’s revenues in the second quarter of 2021.

The addition of Henry’s complementary solutions will strengthen Carlisle Construction Materials segment’s offerings for repair and restoration works as well as construction activities. The company believes that the buyout will strengthen the segment’s growth opportunities and innovative capabilities in the commercial construction market. It also expects this to enhance the segment’s presence in North America’s residential construction market.

The Henry buyout is anticipated to generate revenue synergies from the cross-selling of products. Carlisle expects pre-tax cost synergies of about $30 million by 2025 from the acquisition. It also expects the deal to boost its 2022 earnings by $1.25 per share. The buyout will be accretive to the company’s growth and earnings before interest, taxes, depreciation, and amortization margin outlook immediately.

It’s worth noting that the buyout is in sync with the company’s Vision 2025 strategy and contributes to achieving earnings of more than $15.00 per share.

Zacks Rank, Estimate Trend and Price Performance

With a $10.9-billion market capitalization, Carlisle currently carries a Zacks Rank #2 (Buy). The company is poised to benefit from strength in the U.S. reroofing end markets and acquired assets in the quarters ahead. Its focus on product launches, along with an improved outlook for industrial capital spending, is likely to aid it.

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In the past three months, shares of Carlisle have rallied 10.7% compared with the industry’s growth of 7.9%.

The Zacks Consensus Estimate for the company’s earnings is pegged at $9.13 for 2021 and $11.56 for 2022, up 3.9% and 6.8%, respectively, from the 60-day-ago figures.

Other Key Picks

Some other top-ranked stocks from the same space are Raven Industries, Inc. RAVN, Crane Co. CR and Federal Signal Corporation FSS. While Raven currently sports a Zacks Rank #1 (Strong Buy), Crane and Federal Signal carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Raven pulled off a positive earnings surprise of 42.59%, on average, in the trailing four quarters.

Crane pulled off a positive earnings surprise of 19.54%, on average, in the trailing four quarters.

Federal Signal pulled off a positive earnings surprise of 11.77%, on average, in the trailing four quarters.

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Carlisle Companies Incorporated (CSL) : Free Stock Analysis Report

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Crane Co. (CR) : Free Stock Analysis Report

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