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Dana (DAN) Boosts Portfolio Via Acquisition of Nordresa

Zacks Equity Research

In a bid to enhance electrification capabilities, Dana Incorporated DAN recently acquired Canadian e-powertrain integrator, Nordresa Motors. The financial terms of the transaction have been still kept under wraps. Notably, the transaction is a win-win for both the companies.

This buyout will boost Dana’s business by integrating its portfolio of motors, inverters, chargers, gearboxes and thermal-management products with Nordresa’s battery-management system, electric powertrain controls, and integration expertise. The U.S. auto parts manufacturer will benefit from Nordresa’s expertise in designing and integrating EV systems, which will enable Dana to offer a complete system solution including fully-integrated e-Axles, battery and powertrain controls, and thermal management. On the other hand, the transaction will expand Nordresa’s global footprint and customer base, thereby creating long-term value for customers. Notably, Nordresa's founders will serve in leadership positions at Dana.

Early this year, Dana completed the $600 million acquisition of Oerlikon Group’s Drive Systems segment, which consists of Graziano and Fairfield brands.The deal is likely to enhance Dana’selectronic controls ability for transmissions and drivelines, in turn backing the company’s electrification capabilities in key markets. Notably, Grazino and Fairfield businesses contributed $211 million and $24 million to its sales and profits, respectively, during the second quarter of 2019. Total sales of Dana during the last reported quarter came in at $2.3 billion, marking the 11th consecutive quarter of top-line growth.

Strong backlog and accretive buyouts are expected to drive the company’s financials in 2019.For the current year, it expects $8.95-$9.35 billion in sales and $2.95-$3.45 in adjusted earnings per share.

Zacks Rank & Key Picks

Dana currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the same industry are Wabash National Corporation WNC, Allison Transmission Holdings, Inc. ALSN and Gentex Corporation GNTX. While Wabash flaunts a Zacks Rank #1 (Strong Buy), Allison and Gentex both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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