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John Bean (JBT) Buys AutoCoding, Boosts In-Line Coding Abilities

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Zacks Equity Research
·4 min read
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John Bean Technologies Corporation JBT has acquired AutoCoding Systems Ltd. for $17 million in a bid to expand its competencies in packaging line equipment and related devices, including coding and label inspection and verification.

Based in Runcorn, the U.K., AutoCoding is a leading provider of software solutions for automatic set-up and control of end-of-line packaging devices. The company additionally operates in the United States and Australia, generating annual revenues of approximately $7 million.

AutoCoding's central command software solution integrates and automates the usage of in-line packaging devices, such as coders, scanners, labelers, and checkweighers, while reducing manual inspection for line configuration. AutoCoding is scalable across John Bean’s FoodTech's diverse end markets and is a strategic fit for its Proseal business.

Moreover, AutoCoding assists customers to reduce food waste, while ensuring accurate food packaging information and food safety. Notably, the latest buyout will fortify John Bean’s abilities in the growing global market for in-line coding and inspection solutions that include hardware and software for pharmaceutical, food & beverage, and nutraceutical customers.

Last month, John Bean reported adjusted earnings of $1.02 per share in fourth-quarter 2020, surpassing the Zacks Consensus Estimate of 89 cents. Revenues of $439 million also beat the Zacks Consensus Estimate of $428 million. However, earnings and revenues both declined 32% and 20% year over year, respectively.

John Bean has a strategic acquisition program focused on companies that add complementary products, which enable it to offer more comprehensive solutions to customers. In 2019, the company acquired Proseal UK Limited, a leading provider of tray sealing technology, and Prime Equipment Group, Inc., a manufacturer of turnkey primary and water re-use solutions to the poultry industry. The buyout of Prime has supported its goal of becoming the preferred provider of full-line solutions for poultry customers. Last May, the company acquired certain assets and liabilities of MARS Food Processing Solutions, LLC. Mars’ proprietary solutions for monitoring and managing the efficiency of poultry processing plants complements John Bean’s existing equipment and solutions, and facilitates its participation in primary poultry processing.

In third-quarter 2020, John Bean implemented a restructuring plan for manufacturing capacity rationalization, affecting both FoodTech and AeroTech segments. These restructuring actions are expected to generate incremental cost savings of $5 million in 2021. Also, John Bean’s Elevate plan is likely to boost continued growth and margin expansion.

Price Performance

John Bean’s shares have gained 47.4% in the past year compared with the industry’s rally of 91.8%.

Zacks Rank & Stocks to Consider

John Bean currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Industrial Products sector are Deere & Company DE, AGCO Corporation AGCO and Avery Dennison Corporation AVY. While Deere flaunts a Zacks Rank of 1 (Strong Buy), AGCO Corporation and Avery Dennison carry a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Deere & Company has a projected earnings growth rate of 38.8% for fiscal 2021. Over the past year, the company’s shares have appreciated 119.2%.

AGCO Corporation has an estimated earnings growth rate of 42.7% for the ongoing year. The company’s shares have surged 107.4% in the past year.

Avery Dennison has an expected earnings growth rate of 13.7% for 2021. The stock has rallied 48% in a year’s time.

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