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TriMas (TRS) Acquires Affaba & Ferrari, Expands Product Offering

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TriMas Corporation TRS recently completed the acquisition of Affaba & Ferrari, Italy-based designer and manufacturer of engineered caps and closures for food and beverage, and industrial applications.

Notably, the latest acquisition will aid the company to strengthen its existing food and beverage and industrial product lines, while offering new product applications for consumer packaged goods and top-grade industrial customers.

Affaba & Ferrari is now part of TriMas’ Packaging business. Affaba & Ferrari is anticipated to achieve approximately €32 million ($38.8 million) revenues in fiscal 2020. The company offers various innovative products for European customers including aseptic caps for juices, dairy products and energy drinks, as well as child-proof, flex spout, and other caps and closures utilized across food and beverage, agrochemical and industrial applications.

In October, TriMas entered into an agreement to acquire Affaba & Ferrari. TriMas will fund this buyout primarily from its existing cash in hand and credit facilities. The company ended the third quarter with $389.2 million of unrestricted cash and aggregate availability under its revolving credit facility. Further, as of Sep 30, 2020, TriMas’ total debt to total capital ratio was at 0.35. Given the company’s robust cash flow in the current year and lower leverage, the management noted in the third-quarter earnings call that the net debt-to-EBITDA will remain less than 2.0x even after the deal’s closure.

The company acquired Plastic Srl and Taplast in 2019, which augmented its product offerings and expanded geographic presence, while boosting growth of the packaging platform. Apart from this, the company acquired the Rapak brand, including certain bag-in-box product lines and assets, from Liqui-Box. The Rapak brand name, and bag-in-box applications and products will improve its packaging portfolio. These buyouts are expected to contribute to the company’s top line. TriMas has a robust pipeline of potential M&A in the Packaging segment.

TriMas reported revenues of $199 million in third-quarter 2020, reflecting a year-over-year increase of 6% on record sales in the Packaging segment and acquisitions. This segment has been benefiting from high demand for dispensing pumps and closure products amid the pandemic. Considering this, the segment’s sales are expected to be up 21-23% year over year in the current year. TriMas is also witnessing escalating demand for personal care and home care products, and is planning to boost its capacity globally to meet customer requirements.

Share Price Performance

Shares of TriMas have gained 30.1% over the past six months compared with the industry’s growth of 41.9%.


 

Zacks Rank & Other Stocks to Consider

TriMas currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other top-ranked stocks in the Industrial Products sector include iRobot Corporation IRBT, Deere & Company DE and Silgan Holdings Inc. SLGN. While iRobot and Deere flaunt a Zacks Rank #1, Silgan carries a Zacks Rank of 2, at present.

iRobot has an estimated earnings growth rate of 18.8% for the ongoing year. Shares of the company have gained 1.7% in the six months.

Deere has an expected earnings growth rate of 46% for fiscal 2021. The stock has appreciated 59.6% in six months’ time.

Silgan has a projected earnings growth rate of 37.9% for the current year. Over the past six months, the company’s shares have rallied 12%.

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