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Armstrong World Industries Completes Tectum Acquisition

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Armstrong World Industries, Inc. (AWI - Free Report) has completed its previously announced acquisition of Tectum, Inc. The buyout will assist Armstrong World to expand its leading portfolio of durable, sustainable and acoustical solutions.

Ohio-based Tectum is a manufacturer of acoustical ceiling, wall and structural solutions for commercial building applications. Strong synergies between the Tectum businesses and Armstrong World will help the latter in broadening its product portfolio moving forward.

Last month Armstrong World entered into an agreement to purchase Tectum. The transaction included two facilities in Newark and Columbus, Ohio. Armstrong World expects to fund the acquisition with available cash. However, financial terms of the transaction were not disclosed.

The buyout is in sync with Armstrong World’s strategy of providing higher-value products to customer. Notably, Tectum products will be sold through Armstrong World’s Architectural Specialties business. Tectum’s integrated solutions will save time and labor during the construction process which will improve Armstrong World’s expertise.

The acquisition will help Armstrong World to focus on delivering innovative ceiling solutions to customers. Further, Tectum products will enhance Armstrong World’s efficiency in high-abuse spaces such as gymnasiums and auditoriums. Tectum’s roof deck products for acoustical solutions will also benefit Armstrong World.

Armstrong World remains focused on strong innovation in pipeline and customer relationships. It will grow by leveraging this pipeline to provide customers with industry-leading innovative products.

However, Armstrong World’s share price performance has underperformed the Zacks categorized Building & Construction Products - Miscellaneous industry in the past one year owing to lower commodity prices & weakness in international markets. The stock lost 0.7%, while the industry gained 42.5% over the same time frame.



Zacks Rank & Key Picks

Armstrong World currently carries a Zacks Rank #5 (Strong Sell). Better-ranked stocks in the sector include Gibraltar Industries, Inc. (ROCK - Free Report) , NCI Building Systems, Inc. and MasTec, Inc. (MTZ - Free Report) . Gibraltar Industries has an average earnings surprise of 67.30% for the last four quarters and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NCI Building also carries a Zacks Rank #1 and has an average earnings surprise of 87.26% for the trailing four quarters. MasTec, another Zacks Rank #1 stock, has an average positive earnings surprise of 61.27% for the past four quarters.

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