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Chart Industries (GTLS) to Buy Sustainable Energy, Adds HTEC Stake

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Chart Industries, Inc. GTLS yesterday announced that it will soon acquire Sustainable Energy Solutions, Inc. Per the letter of intent signed, the company will pay $20 million in cash and some related earn-out.

In addition to this announcement, the company disclosed that it acquired a 15.6% stake in HTEC Hydrogen Technology & Energy Corporation (“HTEC”). The two parties also worked on a Memorandum of Understanding related to hydrogen.

It is worth mentioning here that Chart Industries’ shares gained 5.78% yesterday, closing the trading session at $121.08.

Inside the Headlines

Based in Utah, Sustainable Energy is a specialist in dealing with energy industry-related sustainability problems. Its most popular offering, which captures carbon from fossil fuel emissions, is Cryogenic Carbon Capture technology. This solution can be easily used with cryogenic storage equipment, heat exchangers (both air-cooled and brazed aluminum), IPSMR refrigeration system, and others.

As noted, the buyout will expand Chart Industries’ existing offerings in the carbon capture solutions space. It will also expand its capabilities in multiple addressable markets, including energy storage, liquid CO2 onsite storage options and others. In the future, the buyout will help expand the company’s addressable market in direct air and carbon capture by $200 million to $600 million.

In addition to the above-mentioned facts, Chart Industries communicated that this buyout will not notably impact its 2021 expectations. Upon the completion of necessary document work, the buyout is expected to be completed in a month’s time.

As regard to stake acquisition in HTEC, Chart Industries paid CAD$20 million. This investment is anticipated to solidify the company’s presence in the clean energy market. Notably, HTEC is a specialist in manufacturing and operating solutions related to hydrogen fuel supply. It has strong footholds in Canada and a solid customer base.

Also, both Chart Industries and HTEC will work on a commercial agreement, whereby the former will supply hydrogen equipment to the latter’s projects.

Chart Industries’ Buyout Activities

The company believes in acquiring businesses/assets in an attempt to gain access to new customers, regions and product lines.

So far in the fourth quarter of 2020, Chart Industries acquired Worthington Industries, Inc.’s WOR cryogenic trailer and hydrogen trailer business in Theodore, AL. In addition, the company purchased Microbulk cryogenic tank business from IC Biomedical for an undisclosed amount as well as added BlueInGreen, LLC, for $20 million and certain earn-outs, to its portfolio.

Zacks Rank, Price Performance and Earnings Estimate Trend

With a market capitalization of $4.1 billion, Chart Industries currently carries a Zacks Rank #3 (Hold).

In the past three months, the company’s shares have gained 71.7% compared with the industry’s growth of 11.2%.




 

Meanwhile, the Zacks Consensus Estimate for its earnings is pegged at $2.49 for 2020 and $3.34 for 2021, reflecting a decline of 2.4% and growth of 7.4% from the respective 60-day-ago figures. Also, the consensus estimate for the fourth quarter has been raised by 2.6% to 80 cents during the same timeframe.

Chart Industries, Inc. Price and Consensus

 

Chart Industries, Inc. Price and Consensus
Chart Industries, Inc. Price and Consensus

Chart Industries, Inc. price-consensus-chart | Chart Industries, Inc. Quote

Stocks to Consider

Two better-ranked stocks in the industry are Altra Industrial Motion Corp. AIMC and Applied Industrial Technologies, Inc. AIT. While Altra Industrial currently sports a Zacks Rank #1 (Strong Buy), Applied Industrial carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, earnings estimates for these companies improved for the current year. Also, earnings surprise in the last reported quarter was positive 77.55% for Altra Industrial and 39.06% for Applied Industrial.

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Worthington Industries, Inc. (WOR) : Free Stock Analysis Report
 
Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report
 
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