Research Desk Line-up: Intersections Post Earnings Coverage
LONDON, UK / ACCESSWIRE / June 6, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for EnviroStar, Inc. (NYSE: EVI). The Company announced on June 02, 2017, that it has executed a definitive purchase agreement to acquire all the assets of Martin-Ray Laundry Systems, Inc., substantially. The Company has to pay $4.0 million for the acquisition, of which, $2.0 million will be paid in cash and the remaining $2.0 million will be paid in EnviroStar's stock. For immediate access to our complimentary reports, including today's coverage, register for free now at:
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EnviroStar expects this acquisition to establish its presence in the Mountain states as the acquisition provides a business unit from which the Company can execute future growth in the region. Martin-Ray currently serves about 1,500 customers in the healthcare, hospitality, commercial, and vended laundry markets. Martin-Ray will be led by Jim Hohnstein, Bill Mann, and Timm Mullen, and will operate as a wholly owned subsidiary of EnviroStar under its current name, from its present locations, and existing employees. The acquisition would enable Martin-Ray to operate under EnviroStar's entrepreneurial and growth environment.
Martin-Ray is a Denver, CO, based distributor of commercial, industrial and vended laundry products, and provides installation and routine maintenance services. The Company generated net revenues of $11.5 million for the 12-month period, ended March 31, 2017. Martin-Ray operated through different brands, namely, Pellerin-Milnor, Chicago Dryer, and Speed Queen, across some of the fastest growing markets in the United States.
EVI views this agreement as a step to establish itself as the largest commercial laundry distribution and service Company in North America. The acquisition is set to strengthen EnviroStar's portfolio, while the Company expects to generate future growth in North America. Martin-Ray views this agreement as a step towards ambitious growth initiatives for the business and expects that EnviroStar's capital and relationship resources will enable the acquired Company to achieve its growth objectives and contribute to EnviroStar's success.
EnviroStar Growth Prospects
EnviroStar is primarily a distributor of commercial laundry equipment, industrial boiler equipment, in addition to related parts and supplies. The Company sells its products to more than 7,500 customers through its subsidiaries, across the United States, Latin America, and the Caribbean. The Company additionally excels in delivering related technical services through its expansive network of service technicians.
Last year, on October 11, 2016, EnviroStar announced the acquisition of substantially all of the assets of Western State Design LLC, a California-based distributor of commercial, industrial, and coin-operated laundry products and a provider of installation and routine maintenance services. The transaction was complementary to EnviroStar's portfolio, where, Western State Design and Steiner-Atlantic Corp., a subsidiary of EnviroStar based in Florida, created the commercial laundry industry's largest distributor serving over 7,500 customers across the three different geographies.
The Martin-Ray transaction is subject to customary closing conditions and the Companies intend to close the transaction in the next 30 days. The transaction is expected to be accretive to EnviroStar's earnings.
Recent Earnings Highlights
On May 15, 2017, the Company announced its Q3 FY17 results, for the period ended March 31, 2017. The Company reported net revenues surged by 93% to $24.7 million from $12.8 million, for the period ended March 31, 2017, against the period ended March 31, 2016. EnviroStar had net operating income of $1.5 million for Q3 FY16, which was 25% higher than the $1.2 million reported in Q3 FY16.
Last Close Stock Review
At the closing bell, on Monday, June 05, 2017, EnviroStar's stock surged 24.68%, ending the trading session at $24.50. A total volume of 108.85 thousand shares have exchanged hands, which was higher than the 3-month average volume of 19.55 thousand shares. The Company's stock price skyrocketed 26.61% in the last three months, 80.66% in the past six months, and 516.49% in the previous twelve months. Moreover, the stock soared 68.97% since the start of the year. The stock is trading at a PE ratio of 79.80 and currently has a market cap of $259.21 million.
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