Griffon (GFF) Highlights Importance of Hunter Fan Acquisition
Griffon Corporation GFF yesterday highlighted the benefits of the Hunter Fan Company acquisition, which is anticipated to be completed by the end of this month, to its shareholders. Griffon signed the acquisition agreement on Dec 20, 2021.
Shares of Griffon gained 0.22% yesterday, ending the trading session at $26.88. With a market capitalization of $1.5 billion, Griffon currently carries a Zacks Rank #5 (Strong Sell).
Based in Memphis, TN, Hunter Fan is a leading manufacturer and supplier of residential ceiling fans as well as those suitable for industrial and commercial purposes. Among its offerings are SureSpeed, SIMPLEconnect and WeatherMax fans. It also provides air purifiers, replacement filters, heaters, bath fans, humidifiers, standing fans and thermostats.
Inside the Headlines
In the letter addressed to its shareholders, Griffon noted that the Hunter Fan buyout would be a strategic fit. The assets are anticipated to immediately prove accretive to Griffon’s earnings and cash flow in fiscal 2022 (ending September 2022). Also, it is predicted to boost revenues by $400 million, earnings before interest, tax, depreciation and amortization (“EBITDA”) by $90 million, and earnings by 50 cents per share in fiscal 2023 (ending September 2023).
Hunter Fan’s solid product offerings, innovation capabilities, experienced workforce, healthy e-commerce businesses, and strong customer base — including The Home Depot Inc. HD — will add vigor to Griffon’s existing fan businesses. Popular brands offered by Griffon include True Temper, AMES and ClosetMaid.
Home Depot is considered the largest home improvement specialty retailer globally, taking its net sales into consideration. Exiting third-quarter fiscal 2021 (ended October 2021), it had 2,317 retail stores. Home Depot currently sports a Zacks Rank #1 (Strong Buy) and has a market capitalization of $411 billion. In the past 60 days, Home Depot’s earnings estimates have been increased by 6.8% for fiscal 2021 (ending January 2022) and 8.6% for fiscal 2022 (ending January 2023).
Notably, the Hunter Fan acquisition will be executed by The AMES Companies, Inc., a subsidiary of Griffon, and MidOcean Partners, the seller in the transaction. The transaction value of $845 million will be funded through Griffon’s term-loan facility, available cash and revolving credit facility. The value of $845 million mirrors the 9.4XEBITDA of the first full year of the transaction completion.
Griffon's Price Performance and Earnings Estimates
In the past three months, Griffon's shares have gained 6.2% against the industry's decline of 3.4%.
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The Zacks Consensus Estimate for the company's earnings per share is pegged at $1.71 for fiscal 2022 and $2.03 for fiscal 2023, reflecting declines of 20.1% and 23.4% from the respective 60-day-ago figures. The consensus estimate for the first quarter of fiscal 2022 (ended December 2021, results are awaited) of 13 cents has declined 76.8% over the past 60 days.
Griffon Corporation Price and Consensus
Griffon Corporation price-consensus-chart | Griffon Corporation Quote
Stocks to Consider
Two better-ranked stocks in the industry are discussed below.
Danaher Corporation (DHR) acquired Canada-based Vanrx Pharmasystems in February 2021, while Swift Biosciences was added to its portfolio in first-quarter 2021. In August 2021, Danaher acquired Aldevron. DHR presently carries a Zacks Rank #2 (Buy).
You can see the complete list of today's Zacks #1 Rank stocks here.
Danaher’s shares have gained 2% in the past three months. The Zacks Consensus Estimate for DHR’s earnings has increased 0.5% for 2021 (results are awaited) and 1.8% for 2022 in the past 60 days.
Carlisle Companies Incorporated CSL acquired California-based Henry Company in September 2021. CSL presently carries a Zacks Rank #2.
Shares of Carlisle have gained 15.9% in the past three months. The Zacks Consensus Estimate for CSL’s earnings has been unchanged for 2021 (results are awaited) and has risen 1% for 2022 in the past 60 days.
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Danaher Corporation (DHR) : Free Stock Analysis Report
The Home Depot, Inc. (HD) : Free Stock Analysis Report
Carlisle Companies Incorporated (CSL) : Free Stock Analysis Report
Griffon Corporation (GFF) : Free Stock Analysis Report
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