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Donaldson (DCI) Signs Deal to Acquire BOFA International

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Donaldson (DCI) Signs Deal to Acquire BOFA International

Donaldson (DCI) to acquire BOFA International in order to expand its business in new air-filtration markets.

Donaldson Company, Inc. DCI recently entered into a binding agreement to acquire 88% common stock of BOFA International LTD (‘BOFA’) for £79 million, in order to fortify the existing portfolio of its filtration businesses.

Inside Story

Donaldson intends to boost its competency by diversifying the company’s technology-led filtration business portfolio. The company has a global distribution and manufacturing footprint for state-of-the-art filtration technologies. Against this backdrop, the aforementioned acquisition will extend Donaldson’s business reach across new industrial air filtration applications and markets.

Poole, the U.K.-based BOFA designs and produces fume-extraction systems for different types of air-filtration applications. These extraction systems are utilized in electronics, printing, laser, dental and 3D printing applications. BOFA sells its fume-extraction systems to original equipment manufacturing distributors, customers and end users. The company currently anticipates generating roughly $40-million revenues in the current fiscal.

BOFA will be part of Donaldson’s Industrial Filtration Solutions business and hence, has been grouped under its Industrial Products business segment. The buyout deal is subject to customary closing conditions, but Donaldson anticipates to successfully close it during first-quarter fiscal 2019 (ending October 2018).

Donaldson currently sports a Zacks Rank #1 (Strong Buy). Over the past 30 days, the Zacks Consensus Estimate for the stock moved 4.4% upward to $2.37 for fiscal 2019 (ending July 2019) and 4.4% north to $2.61 for fiscal 2020 (ending July 2020). The year-over-year earnings growth rate for the company is projected at 18.5% and 10.2% for fiscals 2019 and 2020, respectively. Over the past month, Donaldson’s shares have rallied 21.8%, outperforming 12.1% growth recorded by the industry it belongs to.

Other Stocks to Consider

Some other top-ranked stocks in the same space are listed below:

Energy Recovery, Inc. ERII sports a Zacks Rank #1. The company pulled off an outstanding average positive earnings surprise of 261.11% over the preceding four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.

Advanced Emissions Solutions, Inc. ADES carries a Zacks Rank #2 (Buy). The company generated an average positive earnings surprise of 16.40% over the trailing four quarters.

Vertex Energy, Inc VTNR also holds a Zacks Rank of 2. The company came up with an average positive earnings surprise of 36.67% during the same time frame.

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