Badger Meter Acquires National Meter, Adds $15mn to Revenues - Analyst Blog

Shares of Badger Meter Inc. ( BMI ) gained 0.6% as the company announced that it has signed a stock purchase agreementto acquire National Meter and Automation, Inc, the major distributor of its products for the municipal water utility market. The acquisition will add approximately $15 million of incremental revenues to Badger Meter (after elimination of intercompany sales).

Denver, CO-based National Meter caters to customers in Colorado, California, Nevada, Arizona and southern Wyoming. National meter has been distributing Badger Meter's products since 2004.

The acquisition is expected to close on Oct 1, 2014, after which National Meter will become a regional distribution center for Badger Meter. In addition to its primary product line of water meters and meter reading systems, National Meter also provide services including meter testing, leak detection, water audits, meter and meter reading system installation and meter reading.

Badger Meter reported record second-quarter 2014 earnings per share of 61 cents, up 39% year over year, which outperformed the Zacks Consensus Estimate of 59 cents driven by higher sales of municipal water products. Net sales increased 8% year over year to $96 million in the reported quarter, in line with the Zacks Consensus Estimate. The growth was aided by higher sales of residential and commercial municipal water products, partly offset by decrease in industrial and specialty product sales.

Badger Meter will continue to benefit from investment in research and development as well as the introduction of several new products. Innovation in product offering is a key element of Badger Meter's growth strategy. Furthermore, the Elster business and the ongoing economic recovery will help to drive growth. Moreover, Badger Meter will benefit from improved volumes in both its municipal and industrial product lines.

Headquartered in Milwaukee, WI, Badger Meter provides liquid flow measurement products and control technology. It also serves water and gas utilities, municipalities and industrial customers worldwide. The company's products, which are developed both internally and in collaboration with other technology companies, are used in a wide variety of applications related to water, oil and chemicals.

At present, Badger Meter has a Zacks Rank #2 (Buy). Some other stocks worth considering in the sector include Woodward, Inc. ( WWD ), Roper Industries Inc. ( ROP ) and Cognex Corporation ( CGNX ). All these stocks carry the same rank as Badger Meter.

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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.

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