Donaldson Company, Inc. DCI has recently completed the acquisition of a 49% minority stake in Medica S.p.A. for €62 million ($67.73 million) which excludes transaction-related fees and expenses. This deal was announced in April 2024.
Based in the biomedical district of Mirandola, Italy, Medica is engaged in producing hollow fiber membrane filtration products used for blood purification in numerous applications including dialysis, continuous renal replacement therapies and therapeutic apheresis. Its products and technologies are also used in the microbiological purification of water and automation solutions for disposable medical device manufacturing.
Acquisition Rationale
This acquisition is in sync with DCI’s policy of acquiring businesses to strengthen its business and expand its product portfolio and market share. The inclusion of Medica’s technology and expertise in filtration products will offer growth opportunities to Donaldson. It will enable DCI to penetrate new markets and diversify its offerings in the medical device and water purification sectors.
On a separate note, in June 2023, the company acquired Univercells Technologies, thereby expanding its growing offerings in the life sciences industry. Univercells was added to the Life Sciences segment.
Donaldson acquired Isolere Bio in February 2023. The Isolere buyout enabled the creation of leading separation and filtration solutions for emerging genetic-based drugs. Isolere’s revenues are reported within the Life Sciences segment.
Zacks Rank and Price Performance
DCI currently carries a Zacks Rank #3 (Hold).
Donaldson is well-positioned to benefit from the solid momentum across its segments. Solid momentum in the aftermarket business, driven by market share gains and pricing benefits, is driving the Mobile Solutions segment.
However, softness in off-road and on-road businesses is concerning for the company. Rising selling, general and administrative expenses, owing to increasing headcount and incremental expenses, are expected to weigh on its bottom line in the near term.
In the past year, the stock has gained 13.5% compared with the industry’s 23.6% growth.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked companies are discussed below.
Atmus Filtration Technologies Inc. ATMU currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ATMU delivered a trailing four-quarter average earnings surprise of 13.4%. In the past 60 days, the Zacks Consensus Estimate for Atmus’ 2024 earnings has increased 3.1%.
Tetra Tech, Inc. TTEK presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 9.5%.
In the past 60 days, the consensus estimate for TTEK’s fiscal 2024 earnings has increased 0.7%.
Allegion plc ALLE presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 10.3%.
The Zacks Consensus Estimate for ALLE’s 2024 earnings has increased 1.1% in the past 60 days.
Free Report – 3 Stocks Sneaking Into Hydrogen Energy
Demand for clean hydrogen energy is projected to reach $500 billion by 2030 and grow 5-FOLD by 2050. No guarantees, but three companies are quietly getting the jump on their competition.
Zacks Investment Research is temporarily offering an urgent Special Report naming and explaining these emerging powerhouses primed to boom. Click below for Hydrogen Energy: 3 Industrial Giants to Ride the Next Renewable Energy Wave.
See Stocks Now >>Tetra Tech, Inc. (TTEK) : Free Stock Analysis Report
Donaldson Company, Inc. (DCI) : Free Stock Analysis Report
Allegion PLC (ALLE) : Free Stock Analysis Report
Atmus Filtration Technologies Inc. (ATMU) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
