Milwaukee, Wisconsin based
) recently completed scrutinizing its available options to
enhance shareholders value, ending a program initiated by the
board of directors on Feb 11, this year.
Rexnord operates in mainly two segments; viz., Process &
Motion Control and Water Management. One of the strategic options
Rexnord evaluated was whether to divest one or both of the
segments. Another option that was weighed on was the possible
sale of the entire company.
Goldman Sachs Group Inc.
) served as the financial adviser for the review.
The study concluded that the best option for Rexnord will be
to continue to function as a stand-alone public company.
Management believes that Rexnord's expertise and experience will
enable it to strengthen its market position and increase
profitability in the long run.
The decision follows strong fiscal 2013 results, with earnings
per share increasing by a penny year over year to 98 cents.
Revenue also increased 3.1% year over year to $2.0 billion. This
was mostly driven by acquisitions undertaken by the company.
Adjusted EBITDA also increased 5.0% year over year to $405.0
Moving forward, Rexnord expects earnings per share in fiscal
2014 to be in the range of $1.10-$1.18, signifying a
year-over-year increase of 16.0% at the mid-point. Revenue is
expected to experience an organic growth of 1%-3% in fiscal
Management believes that Rexnord's shareholders will be
benefited by the strategies currently adopted by the company as
well as new alternatives planned to be undertaken.
Rexnord currently carries a Zacks Rank #3 (Hold). Other stocks
to watch out for in the diversified machinery industry are
AO Smith Corp.
), carrying a Zacks Rank #1 (Strong Buy); whereas
Plug Power Inc.
) carries a Zacks Rank #2 (Buy).
SMITH (AO) CORP (AOS): Free Stock Analysis
GOLDMAN SACHS (GS): Free Stock Analysis
PLUG POWER INC (PLUG): Free Stock Analysis
REXNORD CORP (RXN): Free Stock Analysis
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