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Generac Holdlings Enters Into Contract to Acquire Enbala

Zacks Equity Research
·3 min read

Generac Holdlings Inc. GNRC, on Oct 5, announced that it entered a contract to buy Enbala Power Networks Inc. Although the deal is expected to be completed within a month, its terms were kept under wraps.

Generac Holdlings’ shares were down 0.2% yesterday to eventually close at $207.37.

Denver, CO-based Enbala is a major provider of distributed energy optimization and control software, designed for improving the reliability and functional stability of power grids. Notably, Concerto — the company’s leading distributed energy control platform — is used by several utilities and energy companies throughout the world.

Details of Buyout

The addition of Enbala’s advanced virtual power plant and distributed energy resource management platform will enable Generac Holdlings to enhance its capabilities in energy technology and expand the range of solutions it offers to customers in energy markets.

Generac Holdlings believes that the deal will also allow it to capitalize on new opportunities in the grid services market, apart from helping it to strengthen its position in Smart Grid 2.0 technologies.

Other Notable Acquisitions

The latest transaction is in sync with the company’s policy of acquiring businesses to gain access to new customers, regions and product lines.

In September 2020, Generac Holdlings’ business unit, DR Power Equipment, closed the acquisition of Mean Green Products, LLC, a manufacturer of electric mower and accessories. Also, in April 2019, the company acquired Pika Energy, Inc., a producer of innovative battery storage technologies. Further, it acquired Neurio Technology Inc, a leading energy data company in March 2019.

Zacks Rank, Estimates and Price Performance

The company, with $13-billion market capitalization, currently carries a Zacks Rank #2 (Buy). It is poised to benefit from strength across the residential product market, acquisitions and solid customer base in the quarters ahead.

In the past 30 days, earnings estimates for Generac Holdlings have been raised. The Zacks Consensus Estimate for its earnings is pegged at $5.83 for 2020 and $6.59 for 2021, up 0.9% and 1.7% from the respective 30-day-ago figures.

The company’s shares have gained 63.8% compared with 61.2% growth recorded by the industry in the past three months.

Other Stocks to Consider

Some other top-ranked stocks from the Zacks Computer and Technology sector are Aspen Technology, Inc. AZPN, Advanced Energy Industries, Inc. AEIS and Applied Materials, Inc. AMAT. While Aspen Technology and Advanced Energy sport a Zacks Rank #1 (Strong Buy), Applied Materials carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Aspen Technology delivered a positive earnings surprise of 6.19%, on average, in the trailing four quarters.

Advanced Energy delivered a positive earnings surprise of 39.08%, on average, in the trailing four quarters.

Applied Materials delivered a positive earnings surprise of 5.29%, on average, in the trailing four quarters.

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