Worthington Industries, Inc.
) recently acquired leading atmospheric tanks and pressure vessels
maker Westerman Companies for $70 million. The purchase price
includes payment of Westerman debt (roughly $6 million). The
acquired entity will be integrated into the Ohio-based metal
processor's Pressure Cylinders division.
AK STEEL HLDG (AKS): Free Stock Analysis Report
WORTHINGTON IND (WOR): Free Stock Analysis
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Westerman, which reported annual sales of $71.8 million, supplies
tanks and pressure vessels for the global energy and marine
markets. Its energy products are used for a vast range of
exploration, recovery and production purposes across oil and gas
and nuclear markets. Moreover, the company's marine products have
application in shipyard lift systems for large, sea-going vessels.
Westerman is the biggest producer of enriched uranium hexafluoride
storage and transportation cylinders for the global nuclear
industry. It has a broad customer base including companies engaged
in the drilling of the Utica and Marcellus shale formations.
Worthington, which has made a string of acquisitions over the last
few years, said that the Westerman acquisition augurs well with its
growth strategy as it broadens its footprint in the global energy
and alternative fuels markets and offers an opportunity to
diversify in the marine and industrial space. The acquisition
also expands its product offering and market reach.
Worthington, which has annual revenues of roughly $2.5 billion, is
engaged in processing steel for application in the automotive,
construction, hardware, agricultural, aerospace and other
industries. The company makes a range of processed steel items,
pressure cylinders (including oxygen and helium tanks and hand
torches), metal framing products, racks, shipping pallets, airbrake
tanks and consumer products.
Worthington reported strong fourth-quarter fiscal 2012 results
(ended May 31) on June 28 with adjusted earnings of 77 cents per
share crushing the Zacks Consensus Estimate of 54 cents. Revenues
increased 12% year over year to $755.4 million on the heels of a
higher average selling price, increased volume and synergies of
Worthington hopes to continue its earnings momentum moving ahead.
The company expects the economy to improve slowly and its core
businesses to benefit from its growth strategies, which include
acquisitions and expansion in product lines and markets. However,
the construction market may remain soft due to tight government
Worthington, which competes with
AK Steel Holding Corporation
), among others, retains a short-term Zacks #3 Rank (Hold).