Generac to Acquire Baldor Generators Biz - Analyst Blog

By Zacks Equity Research,

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Generac Holdings Inc. ( GNRC ) recently announced to have entered into an agreement with Baldor Electric Company to acquire the latter's generators products division. Financial terms of the transaction have been kept under wraps.

The assets acquired will complement Generac Holdings' existing line of business and will enable deeper penetration into the North American and international markets served by Baldor Electric's generator division. Products including portable, mobile, standby and prime power generators ranging from 3kW to 2.5MW will be added to the company's portfolio.

Baldor Electric Company is wholly owned by ABB Group and its generators products division is located in Oshkosh, Wis. The completion of the transaction is anticipated in the fourth quarter 2013.

Generac Holdings manufactures and sells a variety of generators and other engine powered products for the residential, light commercial, industrial, and construction markets. Earlier in Aug 2013, the company acquired Tower Light Srl and its subsidiaries from the European private equity fund, Ambienta I. Based in Italy, Tower Light is a leader in the development and supply of mobile light towers.

Growth prospects are bright for Generac Holdings. For 2013, management on the back of strong demand growth anticipates net sales growth to be in the low 20% range (prior expectation was low-to-mid teens growth). Growth in the second half of the year is anticipated to be roughly in the mid-single digit range.

Also, Generac Holdings had positive earnings surprise in all of the four trailing quarters with an average of 19.6%. This along with solid result in the second quarter 2013 - adjusted earnings per share of 95 cents, up 63.8% year-over-year and 25.0% above the Zacks Consensus Estimate of 76 cents has raised optimism for better performance ahead.

Over the last 60 days, the Zacks Consensus Estimate for Generac Holdings increased by 1.3% to $3.78 and by 1.4% to $3.70 per share for 2014.

Generac currently has a $2.9 billion market capitalization. The stock carries a Zacks Rank #1 (Strong Buy). Other stocks to watch out for in the industry are Manitex International, Inc. ( MNTX ) and Rexnord Corporation ( RXN ), each with a Zacks Rank #1 (Strong Buy) while another company, CalAmp Corp. ( CAMP ) comes with a Zacks Rank #2 (Buy).

CALAMP CORP (CAMP): Free Stock Analysis Report

GENERAC HOLDING (GNRC): Free Stock Analysis Report

MANITEX INT INC (MNTX): Free Stock Analysis Report

REXNORD CORP (RXN): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: CAMP , GNRC , MNTX , RXN

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