Flowserve Corp. (FLS) has acquired a private American manufacturer of advanced sealless magnetic drive centrifugal pumps, Innovative Mag-Drive, LLC, or Innomag. It was an all cash transaction but the purchase price was not disclosed. Flowserve expects the deal to be dilutive by about 1 cent per share in fiscal 2013 due to transaction costs and non-cash purchase price accounting effects, somewhat offset by favorable operations impact.
The acquisition of Innomag is a strategic move by Flowserve to primarily strengthen its share in its core markets, which include global petrochemical, organic chemical and pharmaceutical industries. Innomag’s portfolio not only complements Flowserve’s existing offerings, but is also an important addition to the latter’s chemical and general industry portfolio.
Innomag is an industry leader and a manufacturer of sealless, non-metallic, mag-drive pumps. The company’s Innomag brand commands a strong reputation within the industry and is being increasingly accepted in the chemical and general industries. For fiscal 2012, Innomag reported revenues of approximately $16.7 million and EBITDA of approximately $6.7 million. For 2013, Innomag expects to report revenues of approximately $19 million and EBITDA of about $7 million.
Therefore, this acquisition is expected to provide Flowserve the platform to capture an attractive market opportunity. Flowserve believes that its global market reach and broad service network will help it to further expand Innomag’s attractive business.
Flowserve continuously evaluates strategic acquisitions and investments to broaden its product portfolio, service capabilities, geographic presence and operational capabilities to meet the growing needs of customers. Flowserve is a leading manufacturer and aftermarket service provider of comprehensive flow control systems. Flowserve develops and manufactures precision-engineered flow control equipment, such as pumps, valves, and seals, for critical service applications that require high reliability.
Flowserve currently has a Zacks Rank #3 (Hold). Other players in the fluid and motion control and pipes industry that are worth a look include Electronic for Imaging Inc. (EFII), Xylem Inc. (XYL) and Parker-Hannifin Corp. (PH). While Electronic for Imaging and Xylem carry a Zacks Rank #1 (Strong Buy), Parker-Hannifin has a Zacks Rank # 2 (Buy).