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Raven (RAVN) Expands Portfolio With Colorado Lining Buyout

Zacks Equity Research

Raven Industries, Inc. RAVN recently inked an asset purchase agreement to acquire substantially all the assets of Colorado Lining International, Inc. The deal is expected to close in September, with Raven paying around $14 million. Over the next three years, the company will pay up to $2 million as additional earn-out payments.

Headquartered in Parker, CO, Colorado Lining offers assistance in flexible membrane liner selection, coating material selection, fabrication techniques and design/build installation.

Colorado Lining has been Raven’s a long-time valued and respected business partner of geomembrane product lines. This acquisition enables future growth opportunities through additional capabilities and products for the containment industry.

Raven has outperformed the industry with an average year-to-date return of 29.9% compared with a decline of 3.7% for the latter. It anticipates exceeding prior-year sales and adjusted operating income in fiscal 2018. In applied technology, the company is increasing market share through technological advancements. Through sustained funding of key R&D projects over the last few years, it introduced two significant new products, Hawkeye nozzle control system and next-generation rate control system. These products are getting favorable customer feedback and generating strong demand. This is expected to continue in fiscal 2018.

Raven manufactures a variety of products for customers in the industrial, construction and military/aerospace markets. The company’s Industries’ Engineered Films Division is well known for manufacturing and supplying flexible films and sheeting to major markets globally.

Raven currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include Bunzl plc BZLFY, CACI International Inc CACI and CGI Group Inc. GIB. All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bunzl plc has a long-term earnings growth expectation of 3.2%.

CGI Group has long-term earnings growth expectations of 9%. It is currently trading at a forward P/E of 17.52x.

CACI International has long-term earnings growth expectations of 10%. It is currently trading at a forward P/E of 18.56x.

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