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Ingersoll Rand (IR) Divests Club Car Unit to Platinum Equity

·3 min read

Ingersoll Rand Inc. IR recently announced that it has completed the divestment of its Specialty Vehicle Technologies (Club Car) segment for $1.68 billion in cash. The other party to the transaction was the private equity investment firm, Platinum Equity. Ingersoll Rand had announced the deal on Apr 12.

Notably, the company’s shares gained 0.8% yesterday to eventually close the trading session at $50.03.

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 line with Ingersoll Rand’s strategy of restructuring its business portfolio. Notably, it 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 reducing its net leverage to less than 1.0x, thus offering value to its shareholders.

It’s worth noting that Ingersoll Rand will report the segment’s results in discontinued operations for second-quarter 2021.

Zacks Rank, Estimates and Price Performance

The company, which has a $21-billion market capitalization, currently carries a Zacks Rank #4 (Sell). The company has been experiencing woes related to high cost and expenses. Also, high debts might be concerning as it might inflate financial obligations.

The Zacks Consensus Estimate for the company’s 2021 earnings is pegged at $1.78, suggesting decrease of 4.3% from the 30-day-ago figure. Also, over the same timeframe, the consensus estimate for its 2022 earnings has decreased 3.3% to $2.06.

Its shares have gained 6.9% in the past three months compared with the industry’s rally of 9.6%.

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks from the same space are Barnes Group, Inc. B, Dover Corporation DOV and Graco Inc. GGG, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Barnes pulled off a trailing-four quarter earnings surprise of 19.45%, on average.

Dover pulled off a trailing four-quarter earnings surprise of 21.35%, on average.

Graco delivered a trailing four-quarter earnings surprise of 28.28%, on average.

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You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.

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