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Trimble Buys Stabiplan to Boost MEP Engineering Solutions

Zacks Equity Research

Trimble Navigation Ltd. TRMB recently acquired StabiplanB.V. The deal will expand the MEP Engineering Solutions of the original equipment manufacturer of positioning, surveying and machine control products.

The financial details of the deal have been kept under wraps.

Based in the Netherlands, Stabiplan is a provider of 3D Computer Aided Design and Engineering software and Building Information Modeling (BIM) content to support the workflow from engineering to construction.

The company’s solutions include Stabicad software and the MEPcontent BIM content library. These solutions help MEP engineers and contractors to deliver technically accurate models and drawings in a more transparent and an effective way. Its solutions cater to the needs of various industries namely, mechanical, electrical and plumbing industries in Europe.

In the last 12 months, shares of Trimble have been steadily treading higher. The stock has returned 40.5% compared with the industry’s growth of 22.1%.

This was largely backed by the company’s aggressive merger and acquisition strategy.

How Will The Deal Help?

Acquisitions have helped Trimble in building a comprehensive portfolio, entering new markets and generating additional revenues.

This acquisition, effective immediately, will enhance Trimble’s capabilities in serving its customers in the building and construction business. The deal will enhance Trimble’s capabilities in automated estimating, project management, modeling, detailing, layout and construction, allowing its clients to develop better technical installations. These new solutions will help MEP contractors and engineers to avoid wastage of time and work with more constructible and actionable models.

Post acquisition, Stabiplan’s businesses will become part of Trimble's Buildings and Infrastructure Segment. In the last reported quarter, Buildings and Infrastructure revenues increased 13.0% year over year to $214.5 million. The deal will further expand the company’s revenues in this segment.

Bottom Line

Acquisitions are part of Trimble’s bid to expand its international business, while sustaining focus on commercial applications. These being more macro-sensitive, allow a stable revenue stream and better profits.

Also, these acquisitions are small compared to Trimble, so there have been no integration issues. Instead, the acquisitions facilitated market expansion and revenues buildup. The company also forms joint ventures to build positions in strategic areas. We expect acquisitions to remain an important growth driver.

Trimble Navigation Ltd. Price and Consensus


Trimble Navigation Ltd. Price and Consensus | Trimble Navigation Ltd. Quote

Other Stocks to Consider

Currently, Trimble Navigation has a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader technology sector are PetMed Express, Inc. PETS, SMART Global Holdings, Inc. SGH and Applied Materials, Inc. AMAT, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings per share growth rate for PetMed Express, SMART Global and Applied Materials is projected to be 10%, 15% and 12.7%, respectively.

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