Lincoln Electric Holdings, Inc.
) has completed the acquisition of three operations from
). The acquired businesses are Kaliburn, Burny and Cleveland
Motion Control (CMC). The financial details of the transaction
ITT CORP (ITT): Free Stock Analysis Report
LINCOLN ELECTRC (LECO): Free Stock Analysis
To read this article on Zacks.com click here.
The facility at Kaliburn offers a wide range of conventional and
high current density plasma cutting systems. Shape cutting
control systems are manufactured in Burny while CMC produces a
broad line of industrial control and automation solutions such as
engineered systems, motion controllers, tension controllers, web
tension control, tension transducers and load cells.
The strategic step will further augment Lincoln Electric's wide
product portfolio, enabling it to cater to a wider clientele with
diversified solutions. The acquired operations employing nearly
140 recruits generated annual sales of $35 million in 2011.
Earlier in May, Lincoln Electric acquired privately held
automated systems and tooling manufacturer, Wayne Trail
Technologies, Inc. for an undisclosed price. It fortified Lincoln
Electric's market leading position in welding automation in North
America along with expanding its wide range of welding and
automated solutions for customers in both the U.S. and
These acquisitions are in line with the goals that Lincoln
Electric has set to achieve by 2020. It expects to double its
market share by 2020. Moreover, it envisions achieving compound
annual revenue growth of 10% or more by 2020. In addition, the
company expects a return on invested capital in excess of 15%
through 2020. With these achievements, the company will
strengthen its position as one of the strongest and successful
welding companies globally.
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. Moreover, demand continues to be strong despite the
challenging macroeconomic environment.
However, raw material costs have been escalating and the company
has a strategy to increase selling prices to counter raw material
inflation. If the company is unsuccessful in increasing future
prices due to competitive pricing across its markets, its margins
will be affected.
Lincoln retains a short-term Zacks #3 Rank (Hold). We have a
long-term Neutral recommendation on the stock.