With the onset of year 2013,
Universal Forest Products, Inc.
) announced to have successfully completed the acquisition of all
the assets of Custom Caseworks, Inc. The deal was initially
announced in December, 2012.
Custom Caseworks specializes in the manufacturing of
point-of-purchase and commercial store fixtures, commercial
casework and office furniture, laminated and painted wood panels,
and OEM-manufactured and private label products. The addition of
Custom's assets will strengthen Universal Forest Products'
industrial business through new product offerings.
Though the financial terms of the acquisition is not known for
certain, the company in its previous press release did announce
that it will use the proceeds raised from issuance of $75 million
worth of notes to fund the acquisition.
Prior to Custom Caseworks, Universal forest purchased assets
of Nepa Pallet and Container Co. Both these acquisitions were in
accordance with the company's expansionary policy which entails
development of industrial business, entry into market without
adding capacities and constant spreading out through
Universal Forest Products Inc. manufactures, treats,
distributes, and installs lumber, composite wood, plastic and
other building products. The current Zacks Consensus Estimate for
the fourth quarter 2012 is 2 cents while that for 2012 and 2013
are $1.20 and $1.81, respectively, reflecting year-over-year
growth of 273.4% for 2012 and 51.5% for 2013.
We currently have an Underperform recommendation on Universal
Forest while the stock also bears a Zacks #4 Rank, implying a
short-term Sell rating. The company competes with other major
players in the industry,
Bluelinx Holdings Inc.
), among others.
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