Praxair's Acquisition & JV Update - Analyst Blog
October 07 2011 - 8:15AM
Zacks
The leading industrial gas
supplier, Praxair Inc’s (PX) subsidiary, Praxair
Distribution Inc. recently announced the acquisition of
Texas-based, National Alloy and Equipment, Inc. Financial terms of
the transaction were undisclosed.
The target company is one of the
leading independent distributor of industrial and specialty gases
and ancillary welding equipment, supplies and services in
Houston.
Recently, Praxair also signed an
agreement with Yara International ASA according to which the former
increased its ownership stake by 10% to 60% in Yara Praxair AS, an
industrial gases joint venture of the two parties in
Scandinavia.
Formed in 2007, Yara Praxair joint
venture comprised Yara International’s industrial gases businesses
located in Norway, Denmark and Sweden. According to the recent
agreement, the venture under the same name will continue to operate
in Oslo, Norway.
It is evident from the present
scenario that the growth prospects of industrial gas producers are
very bright going forward, with demand for gases expected to
increase manifold due to their wide application areas. Praxair aims
to achieve annual organic sales growth in the range of 8-12%, with
emerging markets, including South America, Asia, and Mexico,
accounting for an estimated target of 45% of total sales by
2015.
The current Zacks Consensus
Estimate for the third quarter is $1.39, representing a
year-over-year increase of 15.05%. Estimates for the fiscal years
2011 and 2012 are $5.48 and $6.23, reflecting annual growth of
15.52% and 13.71%, respectively.
The company is slated to release
its third-quarter financial results on October 26, 2011.
The company faces stiff competition
from its rivals like Air Products and Chemicals
Inc.(APD) and Airgas Inc. (ARG). We
currently maintain a Neutral recommendation on Praxair.
AIR PRODS & CHE (APD): Free Stock Analysis Report
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PRAXAIR INC (PX): Free Stock Analysis Report
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