After recently acquiring Texas-based independent gas and
wielding products distributor in November 2012,
) subsidiary, Praxair Distribution Inc. made yet another
acquisition; this time in the greater Houston area.
All assets of PortaGas, a renowned producer of portable
cylinder gases for the specialty gases market, were acquired for
an undisclosed amount. The addition of PortaGas assets to
Praxair's portfolio will enable the company to enhance its search
in the portable cylinder gases market.
Prior to this acquisition, Praxair Distribution had purchased
Acetylene Oxygen Company (AOC) for an undisclosed amount a month
earlier. This acquisition was made to ease Praxair's access to
the former's twenty four operating areas in the central and
southern Texas, including four cylinder filling plants.
Furthermore, in January 2012, Praxair Distribution had
acquired Texas-based Welders Industrial Supply, LLC, an
independent distributor of industrial and specialty gases,
welding equipment, supplies and related services.
Long-term growth prospects are now bright for the company.
Praxair's policy of returning values to shareholders through
dividends and share buybacks as well as strategic acquisitions
and joint ventures have a good deal of potential and will also
help the company in achieving its long-term target of annual
organic sales growth of 8%-12% by 2015.
The current Zacks Consensus Estimate for the fourth quarter
2012 is $1.38, representing a year-over-year growth of 1.8%.
Estimates for 2012 and 2013 are $5.57 and $6.18, reflecting
annual growth of 2.5% and 11.1%, respectively.
We currently maintain a Neutral recommendation on Praxair. The
stock also carries a Zacks #4 Rank, implying a short-term (1-3
months) Sell rating. Its prime competitor
Air Products & Chemicals Inc.
) has a Zacks #4 (Sell) rating.
AIR PRODS & CHE (APD): Free Stock Analysis
PRAXAIR INC (PX): Free Stock Analysis Report
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