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Timken Boosts Inorganic Growth Trajectory With Rollon Buyout


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The Timken CompanyTKR , successfully acquired premium engineered linear motion product manufacturer - Rollon Group, on Sep 18, Financial terms of the transaction have not been disclosed. Share price of the company spiked nearly 2% to $49.50 per share, after news of the acquisition surfaced.

The strategic buyout will strengthen Timken's existing portfolio of industrial brands and is anticipated to be accretive to earnings in the first year of deal completion.

Buyout Story

The aforementioned acquisition will expand Timken's business footprint in high-growth markets around the globe. Rollon's state-of-the-art linear motion product categories will complement several brands of the company, such as Drives, Lovejoy, Philadelphia Gear and Groeneveld.

Milan, Italy-based Rollon owns non-imitable motion-control technological expertise and is acknowledged for developing custom-made linear motion products for its end-users. The company manufactures and designs telescopic rails, liner guides and linear actuators for various industries, including aerospace, passenger rail, logistics, packaging, automation and medical. The production facilities of the company are located in the United States, Germany and Italy. Rollon anticipates generating approximately $140 million revenues in 2018.

Timken Stock Looks Attractive

Timken manufactures, engineers, and sells gear drives, belts, chain, market bearings, couplings and linear motion products across the globe. In addition to this, the company provides a wide array of repair and powertrain rebuild services in the market. It is poised to bolster its revenues and profitability supported by strategic business acquisitions.

Prior to the Rollon buyout, on Sep 4, the company successfully acquired Cone Drive - a prominent precision drive producer. The acquisition will likely strengthen Timken's existing power-transmission business. Furthermore, it is expected to fortify the company's footprints in the emerging market of China.

At present, Timken carries a Zacks Rank #2 (Buy) and flaunts a VGM Score  of A. Over the past three months, shares of the company have rallied 11.4%, as against 0.3% loss recorded by the industry it belongs to.

Per our estimates, the company's year-over-year revenue growth is currently pegged at 21.1% and 9.6% for 2018 and 2019, respectively. On the other hand, year-over-year earnings growth rate is currently projected at 58.6% and 11.6% for 2018 and 2019, respectively. Notably, Timken's earnings per share are predicted to be up 14.9% over the next three to five years.

Other Stocks to Consider

Some other top-ranked stocks in the industry are listed below:

Global Brass and Copper Holdings, Inc. BRSS sports a Zacks Rank of 1 (Strong Buy). The company pulled off an average positive earnings surprise of 5.65% over the trailing four quarters. You can see the complete list of today's Zacks #1 Rank stocks here .

TriMas Corporation TRS carries a Zacks Rank #2. The company delivered an average positive earnings surprise of 2.28% over the last four quarters.

ABB Ltd ABB also holds a Zacks Rank of 2. The company came up with an average positive average earnings surprise of 12.03% during the same time frame.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Stocks
Referenced Symbols: ABB , TRS , TKR , BRSS



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