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Flowserve Corporation (FLS - Free Report) recently completed its previously announced acquisition of MOGAS Industries for $305 million, which includes the potential earnout. The company funded the transaction through its cash balance.
Based in Houston, TX, MOGAS is engaged in providing mission-critical severe service valves and related aftermarket services. The company’s products are sold to several end markets, including power, mining and process industries. It has an extensive geographic presence with sales and service offices in Europe, Canada, South America, Australia, China, India and the Middle East.
Acquisition Rationale
The latest buyout decision is in sync with Flowserve’s policy of acquiring businesses to strengthen its business and product portfolio. The company will incorporate MOGAS into its Flow Control Division segment, which manufactures valves, valve automation products, boiler controls and solutions.
The addition of MOGAS’ differentiated valve products and technical expertise in diverse end markets will allow Flowserve to strengthen its foothold in mining, mineral extraction and process industries. The buyout will augment the company’s existing valve and automation product portfolio and accelerate its 3D growth strategy by significantly boosting its direct mining and mineral extraction exposure.
The acquisition will likely boost FLS’ aftermarket potential and generate revenue growth synergies. The company expects the transaction to be accretive to its adjusted earnings per share in the first full year of closing.
FLS Stock’s Zacks Rank & Price Performance
Flowserve, with approximately $7.2 billion market capitalization, currently sports a Zacks Rank #1 (Strong Buy).
The company is set to gain from strong momentum in the Pump Division and Flow Control Division segments. Strength in the aftermarket and original equipment businesses, driven by an increase in demand for products and services in North America, Europe, the Middle East and Latin America, is a prime catalyst for the Pumps Division segment’s growth. An increase in original equipment sales in the Middle East, North America, Asia Pacific and Europe regions is supporting the Flow Control Division segment’s performance.
Image Source: Zacks Investment Research
In the past year, the company’s shares have gained 38.3% compared with the industry’s 29.1% growth.
The Zacks Consensus Estimate for earnings is pegged at $2.77 per share for 2024, indicating an increase of 1.1% from the 60-day-ago figure.
Other Key Picks
Other top-ranked companies from the same space are discussed below.
NDSN delivered a trailing four-quarter average earnings surprise of 4.1%. In the past 60 days, the Zacks Consensus Estimate for Nordson’s fiscal 2024 earnings has increased 0.3%.
Crane Company (CR - Free Report) presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 11.2%.
In the past 60 days, the Zacks Consensus Estimate for CR’s 2024 earnings has increased 0.6%.
Parker-Hannifin Corporation (PH - Free Report) currently carries a Zacks Rank of 2. PH delivered a trailing four-quarter average earnings surprise of 11.2%.
In the past 60 days, the consensus estimate for Parker-Hannifin’s fiscal 2025 (ending June 2025) earnings has increased 0.3%.
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Flowserve Acquires MOGAS Industries & Enhances Product Portfolio
Flowserve Corporation (FLS - Free Report) recently completed its previously announced acquisition of MOGAS Industries for $305 million, which includes the potential earnout. The company funded the transaction through its cash balance.
Based in Houston, TX, MOGAS is engaged in providing mission-critical severe service valves and related aftermarket services. The company’s products are sold to several end markets, including power, mining and process industries. It has an extensive geographic presence with sales and service offices in Europe, Canada, South America, Australia, China, India and the Middle East.
Acquisition Rationale
The latest buyout decision is in sync with Flowserve’s policy of acquiring businesses to strengthen its business and product portfolio. The company will incorporate MOGAS into its Flow Control Division segment, which manufactures valves, valve automation products, boiler controls and solutions.
The addition of MOGAS’ differentiated valve products and technical expertise in diverse end markets will allow Flowserve to strengthen its foothold in mining, mineral extraction and process industries. The buyout will augment the company’s existing valve and automation product portfolio and accelerate its 3D growth strategy by significantly boosting its direct mining and mineral extraction exposure.
The acquisition will likely boost FLS’ aftermarket potential and generate revenue growth synergies. The company expects the transaction to be accretive to its adjusted earnings per share in the first full year of closing.
FLS Stock’s Zacks Rank & Price Performance
Flowserve, with approximately $7.2 billion market capitalization, currently sports a Zacks Rank #1 (Strong Buy).
The company is set to gain from strong momentum in the Pump Division and Flow Control Division segments. Strength in the aftermarket and original equipment businesses, driven by an increase in demand for products and services in North America, Europe, the Middle East and Latin America, is a prime catalyst for the Pumps Division segment’s growth. An increase in original equipment sales in the Middle East, North America, Asia Pacific and Europe regions is supporting the Flow Control Division segment’s performance.
Image Source: Zacks Investment Research
In the past year, the company’s shares have gained 38.3% compared with the industry’s 29.1% growth.
The Zacks Consensus Estimate for earnings is pegged at $2.77 per share for 2024, indicating an increase of 1.1% from the 60-day-ago figure.
Other Key Picks
Other top-ranked companies from the same space are discussed below.
Nordson Corporation (NDSN - Free Report) currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NDSN delivered a trailing four-quarter average earnings surprise of 4.1%. In the past 60 days, the Zacks Consensus Estimate for Nordson’s fiscal 2024 earnings has increased 0.3%.
Crane Company (CR - Free Report) presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 11.2%.
In the past 60 days, the Zacks Consensus Estimate for CR’s 2024 earnings has increased 0.6%.
Parker-Hannifin Corporation (PH - Free Report) currently carries a Zacks Rank of 2. PH delivered a trailing four-quarter average earnings surprise of 11.2%.
In the past 60 days, the consensus estimate for Parker-Hannifin’s fiscal 2025 (ending June 2025) earnings has increased 0.3%.