Lincoln Electric Holdings Inc.
) recently announced the acquisition of has Chattanooga-based
Tennessee Rand Inc., a privately held manufacturer of tooling and
robotic systems for welding applications, for an undisclosed
Tennessee Rand, with annual sales of approximately $35
million, primarily serves the automotive and metal fabrication
customers. The acquisition is expected to fortify Lincoln
Electric's market leading position in welding automation in North
America. Tennessee Rand's extensive tool design, system building,
and machining capabilities will enable Lincoln to further expand
its welding automation business.
This acquisition is in sync with Lincoln Electric's earlier
buy of privately held automated systems and tooling manufacturer,
Wayne Trail Technologies, Inc, in May 2012. Wayne Trail is a
leading designer and supplier of flexible, automated systems for
metal forming, metal fabricating and metal joining applications.
The acquisition expanded the company's wide range of welding and
automated solutions for customers both in the U.S. and
These acquisitions are in line with the goals that Lincoln
seeks to achieve by 2020. The company expects to double its
market share and achieve compound annual revenue growth of 10% or
more. Further, the company expects return on invested capital in
surplus of 15% through 2020. These achievements will continue to
strengthen Lincoln's position as one of the strongest and
successful welding companies worldwide.
Lincoln Electric invests significantly in acquiring new
businesses in North America as the region contributes more than
50% to its business and has proved to be the strongest geographic
region for the company. The recent addition of Tennessee Rand
will further enhance the company's product portfolio and help it
to serve a wider customer base.
However, weak global economic condition will be headwind going
forward. Moreover, slow growth rates in the North America welding
segment is an added concern. We currently have a Zacks #4 Rank
(short-term Sell rating) on the stock.
Cleveland, Ohio-based Lincoln Electric designs, develops and
manufactures arc welding products, robotic arc-welding systems,
plasma and oxyfuel cutting equipment and commands a leading
position in the brazing and soldering alloys market.
Flow International Corporation
Stanley Black & Decker, Inc.
) are other Zacks #4 Rank stocks in the same industry.
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