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RPM International (RPM) Acquires NOW's Fabrication Business
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RPM International Inc.’s (RPM - Free Report) unit Tremco CPG Inc. acquired the wall system fabrication segment (the Fabrication Business) of NOW Specialties, LLC (NOW).
The Texas-based company’s Fabrication Business, which has annual net sales of approximately $20 million, is now part of the Tremco Construction Products Group (CPG). The terms of the transaction were not disclosed.
Buyout Benefits
The acquired leading wall-system fabricator, specializing in Metal Composite Material and Aluminum Composite Material panels, fits comfortably with RPM’s Tremco CPG’s building envelope systems. This buyout will help expand the metal panel façade product portfolio of Tremco CPG.
RPM is optimistic about the acquisition, as it believes this will solidify Tremco CPG’s value proposition of providing customers with compatible building envelope solutions that enhance efficiency, extend building life and provide customized aesthetics.
Image Source: Zacks Investment Research
Shares of RPM declined 1.5% during the trading session on Oct 3. However, the stock has gained 5.5% in the past three months against the Zacks Paints and Related Products industry’s 2.5% decline.
Acquisitions & Divestitures – Growth Drivers
RPM International tends to focus on profitable acquisitions and divestitures to fuel its growth strategy. During fiscal 2023, the company engaged in six acquisitions across its four reportable segments, comprising Construction Products group, Performance Coatings group, Consumer group and Specialty Products group. In the fiscal year, acquisitions contributed about 0.8% to the net sales of the company, while in the fourth quarter of fiscal 2023, acquisitions, net of divestitures, contributed 0.4% to net sales.
RPM facilitated the divestiture of its Guardian business for proceeds of approximately $49.2 million (net of cash disposed) on Jan 20, 2023. Due to this transaction, the company realized a profit of $24.7 million during fiscal 2023.
During fiscal 2022, it completed eight acquisitions in three segments. Most notably, it acquired a chemical manufacturing facility located in Corsicana, TX, within the CPG segment. It also acquired a Clearwater, FL-based indoor air quality solutions provider.
Zacks Rank
RPM International currently carries a Zacks Rank #3 (Hold).
TopBuild delivered a trailing four-quarter earnings surprise of 14.1%, on average. Shares of the company have risen 30.7% in the past year.
The Zacks Consensus Estimate for BLD’s 2023 sales and earnings per share (EPS) indicates growth of 3.3% and 8.4%, respectively, from the previous year’s reported levels.
Sterling delivered a trailing four-quarter earnings surprise of 14.9%, on average. Shares of the company have surged 208.2% in the past year.
The Zacks Consensus Estimate for STRL’s 2023 sales and EPS indicates growth of 3.9% and 29.4%, respectively, from the previous year’s reported levels.
Fluor delivered a trailing four-quarter negative earnings surprise of 5.3%, on average. Shares of the company have gained 21.5% in the past year.
The Zacks Consensus Estimate for FLR’s 2023 sales and EPS indicates growth of 12.6% and 159.8%, respectively, from the previous year’s reported levels.
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RPM International (RPM) Acquires NOW's Fabrication Business
RPM International Inc.’s (RPM - Free Report) unit Tremco CPG Inc. acquired the wall system fabrication segment (the Fabrication Business) of NOW Specialties, LLC (NOW).
The Texas-based company’s Fabrication Business, which has annual net sales of approximately $20 million, is now part of the Tremco Construction Products Group (CPG). The terms of the transaction were not disclosed.
Buyout Benefits
The acquired leading wall-system fabricator, specializing in Metal Composite Material and Aluminum Composite Material panels, fits comfortably with RPM’s Tremco CPG’s building envelope systems. This buyout will help expand the metal panel façade product portfolio of Tremco CPG.
RPM is optimistic about the acquisition, as it believes this will solidify Tremco CPG’s value proposition of providing customers with compatible building envelope solutions that enhance efficiency, extend building life and provide customized aesthetics.
Image Source: Zacks Investment Research
Shares of RPM declined 1.5% during the trading session on Oct 3. However, the stock has gained 5.5% in the past three months against the Zacks Paints and Related Products industry’s 2.5% decline.
Acquisitions & Divestitures – Growth Drivers
RPM International tends to focus on profitable acquisitions and divestitures to fuel its growth strategy. During fiscal 2023, the company engaged in six acquisitions across its four reportable segments, comprising Construction Products group, Performance Coatings group, Consumer group and Specialty Products group. In the fiscal year, acquisitions contributed about 0.8% to the net sales of the company, while in the fourth quarter of fiscal 2023, acquisitions, net of divestitures, contributed 0.4% to net sales.
RPM facilitated the divestiture of its Guardian business for proceeds of approximately $49.2 million (net of cash disposed) on Jan 20, 2023. Due to this transaction, the company realized a profit of $24.7 million during fiscal 2023.
During fiscal 2022, it completed eight acquisitions in three segments. Most notably, it acquired a chemical manufacturing facility located in Corsicana, TX, within the CPG segment. It also acquired a Clearwater, FL-based indoor air quality solutions provider.
Zacks Rank
RPM International currently carries a Zacks Rank #3 (Hold).
Key Picks
Some better-ranked stocks from the Construction sector are TopBuild Corp. (BLD - Free Report) , Sterling Infrastructure, Inc. (STRL - Free Report) and Fluor Corporation (FLR - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
TopBuild delivered a trailing four-quarter earnings surprise of 14.1%, on average. Shares of the company have risen 30.7% in the past year.
The Zacks Consensus Estimate for BLD’s 2023 sales and earnings per share (EPS) indicates growth of 3.3% and 8.4%, respectively, from the previous year’s reported levels.
Sterling delivered a trailing four-quarter earnings surprise of 14.9%, on average. Shares of the company have surged 208.2% in the past year.
The Zacks Consensus Estimate for STRL’s 2023 sales and EPS indicates growth of 3.9% and 29.4%, respectively, from the previous year’s reported levels.
Fluor delivered a trailing four-quarter negative earnings surprise of 5.3%, on average. Shares of the company have gained 21.5% in the past year.
The Zacks Consensus Estimate for FLR’s 2023 sales and EPS indicates growth of 12.6% and 159.8%, respectively, from the previous year’s reported levels.