Lincoln Buys Weartech Int. - Analyst Blog
March 07 2012 - 6:30AM
Zacks
Lincoln Electric Holdings, Inc. (LECO) has
recently completed the acquisition of Anaheim, California based
Weartech International Inc. The financial terms of the transaction
has not been disclosed by either of the companies.
According to Lincoln, the acquisition will help in expanding the
product portfolio of consumable goods and reach out to a wider
customer base globally. Further, the company expects growth to
accelerate in the cobalt welding consumable sector, enhancing
customer relation.
Lincoln’s growth has been driven largely by acquisitions. The
recent acquisition is the prolongation of its strategy of extending
product portfolio as well as customer base in the global arena.
The acquisition of Weartech is expected to complement Lincoln’s
operations in the North American segment. Earlier, Lincoln acquired
welding operations of Maryland based Techalloy, Nevada based
Applied Robotics Inc., popularly known by its brand name Torchmate
and Southern California based Arc Products. These deals helped
Lincoln increase the product portfolio in the U.S. market.
Lincoln carried out its global acquisition spree by extending
its footprints in Russia and China. It has Russia based OOO
Severstal-metiz and China based JinzhouJin Tai Welding and Metal
Co., Ltd operating under its wings.
The demand for the products of Lincoln is on the rise, posting
strong growth on the heels of an economic recovery and investments
in the emerging markets. Lincoln, in the recently reported quarter
delivered earnings of 66 cents per share, improving 69% from the
prior year quarter and staying ahead of the Zacks consensus
Estimate of 62 cents. Total revenue increased 35% year over year to
$ 701.6 million, beating the Zacks Consensus Estimate of $664
million.
Currently, the shares of Lincoln retain a Zacks #1 Rank
(short-term “Strong Buy” recommendation). It competes with the
companies like Illinois Tool Works Inc. (ITW),
Charter International Plc and ESAB Group
Holdings Ltd.
Weartech is a privately held company which produces hard and
wear-resistant welding consumables made of cobalt. It provides
cobalt welding consumable goods to the high growth energy and
process chemical segments through its plants in Anaheim and Port
Talbot, Wales.
Based in Cleveland, Ohio, Lincoln Electric is a full-line
manufacturer and reseller of welding and cutting products. The
company’s welding products range from welding power sources, wire
feeding systems, robotic welding packages, fume extraction
equipment, consumables and fluxes to regulators and torches used in
cutting. The level of product technology varies from basic units
employed in light manufacturing to sophisticated robotic
applications used in high-production welding and fabrication.
ILL TOOL WORKS (ITW): Free Stock Analysis Report
LINCOLN ELECTRC (LECO): Free Stock Analysis Report
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