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Kaman Segment Boosts Bearing Business on GRW Buyout

Premium industrial goods company Kaman CorporationKAMN continues to ride on the growth track with lucrative inorganic deals. The company manufactures and sells different types of aerospace and defense products in the global industrial goods market. With a high brand value, Kaman is regarded as the largest supplier of integrated aerostructural components, offering diversified aerostructure solutions for designing, tooling, supporting, manufacturing and testing.

Recently, Kamans' aerospace business segment, Kaman Aerosystems, inked a definitive agreement to acquire a renowned German designer and manufacturer of super-precision mini-ball bearings, GRW Bearing GmbH (''GRW''). The terms of the transaction or its monetary value were not disclosed.

GRW's mini-ball bearings possess unique operating capabilities as well as non-imitable engineering design. These bearings are widely used in machines that work in extreme temperatures, comprise ultra-high speed and require low noise. The company is expected to earn almost €48 million ('Euros') from sale of these bearings at the end of 2015.

As a multinational company, Kaman is exposed to several macroeconomic and industry-specific headwinds. The company encounters extensive rivalry within the industry from players like Middleby Corp. MIDD , Altra Industrial Motion Corp. AIMC and Barnes Group Inc. B . Any strategic progress on part of these peers can hurt Kaman's financials in the near future. However, notwithstanding such negatives, we believe the company would manage to sustain its growth momentum on the back of profitable inorganic deals.

The strategic acquisition of GRW is expected to augment Kaman's earnings per share in 2016. Moreover, the transaction will likely increase the company's earnings before interest, taxes, depreciation, and amortization ('EBITDA') by two to three times. Also, the integration of GRW would serve to fortify Kaman's specialty bearing and engineered product category, and thereby help it tap the growing demand from original equipment manufacturing customers.

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BARNES GRP (B): Free Stock Analysis Report

ALTRA INDUS MOT (AIMC): Free Stock Analysis Report

KAMAN CORP A (KAMN): Free Stock Analysis Report

MIDDLEBY CORP (MIDD): Free Stock Analysis Report

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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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