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Ingersoll Rand (IR) to Divest Club Car Business for $1.68B

·3 min read

Ingersoll Rand Inc. IR recently announced that it has entered into a definitive deal to divest its Specialty Vehicle Technologies Segment (“Club Car”), for $1,680 million in cash. The other party to the deal is the private equity investment firm, Platinum Equity. The deal is anticipated to close by third-quarter 2021, subject to certain regulatory approvals.

Notably, the company’s shares declined 0.9% yesterday to eventually close the trading session at $50.15.

Inside the Headlines

Club Car is engaged in manufacturing golf, consumer and commercial low-speed vehicles, which are used primarily for commercial utility and personal transportation purpose. The segment also provides aftermarket services.

The divestment is in sync with Ingersoll Rand’s strategy of restructuring its business portfolio and concentrating more on core businesses. Notably, the transaction will enable the company to better focus on and efficiently direct resources to its core mission-critical flow creation technologies and industrial solutions. Also, the deal will improve the company’s financial flexibility apart from strengthening its balance sheet, thus offering value to its shareholders.

Zacks Rank, Estimates and Price Performance

Ingersoll Rand, which has a $21-billion market capitalization, currently carries a Zacks Rank #3 (Hold). The company is poised to gain from solid product portfolio, innovation capabilities and buyouts in the quarters ahead. However, woes related to high cost and international exposure might hurt it.

The Zacks Consensus Estimate for the company’s 2021 earnings is pegged at $1.85, suggesting an increase of 2.2% from the 60-day-ago figure. However, over the same timeframe, the consensus estimate for its 2022 earnings has decreased 1.4% to $2.11.

Ingersoll Rand’s shares have gained 8.3% in the past three months compared with the industry’s rally of 87%.

Stocks to Consider

Some better-ranked stocks from the same space are Chart Industries, Inc. GTLS, Applied Industrial Technologies, Inc. AIT and The Middleby Corporation MIDD. While Chart Industries sports a Zacks #1 Rank (Strong Buy), Applied Industrial and Middleby carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chart Industries delivered a trailing-four quarter earnings surprise of 30.80%, on average.

Applied Industrial delivered a trailing four-quarter earnings surprise of 21.92%, on average.

Middleby delivered a trailing four-quarter earnings surprise of 22.98%, on average.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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