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Middleby (MIDD) Acquires Imperial, Expands Product Offerings

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·3 min read
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The Middleby Corporation MIDD yesterday announced that it has acquired Imperial Commercial Cooking Equipment. This marks the company’s second acquisition this year. The financial terms of the transaction were kept under wraps.

The company’s shares gained 0.4% yesterday, closing the trading session at $173.77.

Based in Corona, CA, Imperial manufactures ranges, ovens, countertop equipment, fryers, and other cooking products for use in the foodservice industry. The firm generates revenues of about $40 million on an annual basis.

Inside the Headlines

The addition of Imperial’s strong product line, coupled with its innovative manufacturing processes and efficient team, is expected to strengthen Middleby’s product offerings in the commercial kitchen end market. Imperial’s solid footprint in the thriving fast-casual chain restaurant space will also act as a tailwind for the company’s brands.

The buyout is likely to expand Middleby’s presence across the west coast and offer higher value to its domestic customers.

Other Inorganic Moves

Middleby focuses on acquiring businesses to strengthen its product lines, solidify, and expand its presence across regions and expand its customer base. The company’s acquisition of Novy (July 2021) is likely to strengthen its product offerings in the residential built-in cooking market. Also, the Wild Goose Filling buyout (December 2020) has been boosting its growth opportunities in the canned beverages market. The United Foodservice Equipment Group acquisition (December 2020) has also been enhancing its foodservice equipment offerings in China.

Acquired assets boosted Middleby’s sales by 1.8% and 2.2% in the first and second quarters of 2021, respectively.

Zacks Rank, Price Performance and Earnings Estimates

Middleby, with a market capitalization of $9.7 billion, currently carries a Zacks Rank #3 (Hold). The company is poised to benefit from increasing orders for its product, robust backlog, acquired assets, and a focus on innovation in the quarters ahead. However, softness at the restaurant industry, owing to the lingering impacts of the pandemic, might continue to have a bearing on its near-term performance.

Zacks Investment Research
Zacks Investment Research

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In the past three months, its shares have gained 1.1% against the industry’s decline of 3.9%.

The Zacks Consensus Estimate for Middleby’s earnings is pegged at $8.37 for 2021 and $9.69 for 2022, reflecting growth of 1.9% and 4.1% from the respective 60-day-ago figures.

Stocks to Consider

Some better-ranked stocks from the same space are Kadant Inc KAI, EnPro Industries, Inc. NPO, and Welbilt, Inc. WBT. While Kadant currently sports a Zacks Rank #1 (Strong Buy), EnPro and Welbilt carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kadant pulled off an earnings surprise of 22.26%, on average, in the trailing four quarters.

EnPro pulled off an earnings surprise of 80.64%, on average, in the trailing four quarters.

Welbilt pulled off an earnings surprise of 216.67%, on average, in the trailing four quarters.

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The Middleby Corporation (MIDD) : Free Stock Analysis Report

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