Credit: Shutterstock photoIndustrial equipment wholesaler Applied Industrial Technologies, Inc.AIT recently announced the acquisition of HUB Industrial Supply. Financial terms of the transaction were kept under wraps.
As revealed, HUB Industrial Supply is a recognized distributor of consumable industrial products. Since 1990, the firm has been serving a vast client base spread across Lake City, FL; Indianapolis, IN; and Las Vegas, NV.
This acquisition will enable Applied Industrial Technologies to expand its product offerings through addition of saw blades and cutting tools, fasteners, abrasive products, safety supplies, paints and related general industrial items, under its Applied Maintenance Supplies & Solutions (Applied MSS) business. Moreover, the company expects the buyout to boost its revenue generation capabilities as well as strengthen its workforce by addition of 52 skilled employees. Operating as a subsidiary of Applied Industrial, HUB Industrial Supply will henceforth be known as HUB Industrial Supply, LLC.
We believe the latest acquisition is consistent with Applied Industrial Technologies' strategic expansion policy, involving both organic and inorganic means. It is also indicative of the company's strong balance sheet and healthy cash position. In Oct 2015, the company had purchased S. G. Morris Co., a distributor of fluid power components and provider of engineered fluid power systems.
Despite such expansionary efforts, exposure to certain headwinds has restricted Applied Industrial Technologies' growth momentum in the near term. With a market capitalization of $1.6 billion, the stock presently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the machinery industry include DXP Enterprises, Inc. DXPE , Gorman-Rupp Co. GRC and Graham Corporation GHM . All three stocks hold a Zacks Rank #2 (Buy).
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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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
