Standard Motor Products, Inc. SMP has announced that it acquired certain assets and liabilities of the Pollak business of Stoneridge, Inc. for around $40 million. The acquisition, which was funded through borrowings under its revolving credit facility, is likely to be beneficial for Long Island City, NY-based Standard Motor.
This acquisition is likely to enhance the company’s growth opportunities in OE/OES, heavy duty and commercial vehicle markets, aftermarket distribution, product management, and services areas. Moreover, this is likely to open up expansion opportunities in the existing and new product line ups. Excluding integration-related one-time expenses, the acquisition is likely to boost the company’s earnings potential.
Notably, the Pollak business of Stoneridge has manufacturing and distribution facilities in Canton, MA; El Paso, TX; and Juarez, Mexico. It is engaged in the distribution of a wide range of engine management products, which includes sensors, switches and connectors.
In the past six months, shares of Standard Motor have outperformed the industry it belongs to. Its stock gained 2.8% against the industry’s growth of 0.8%.
Zacks Rank and Stocks to Consider
Standard Motor currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the auto space are Ferrari N.V. RACE, General Motors Company GM and Fox Factory Holding Corp. FOXF. While Ferrari currently sports a Zacks Rank #1 (Strong Buy), General Motors and Fox Factory carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ferrari has an expected long-term growth rate of 18.5%. Shares of the company have gained 39.3% over the past three months.
General Motors’ long-term growth rate is projected at 8.9%. Over the past three months, shares of the company have gained 17.1%.
Fox Factory has an expected long-term growth rate of 15.1%. Over the past three months, shares of the company have risen 30.4%.
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