Lincoln Buys Weartech Int. - Analyst Blog

Lincoln Electric Holdings, Inc. ( LECO ) has recently completed the acquisition of Anaheim, California based Weartech International Inc. The financial terms of the transaction has not been disclosed by either of the companies.

According to Lincoln, the acquisition will help in expanding the product portfolio of consumable goods and reach out to a wider customer base globally. Further, the company expects growth to accelerate in the cobalt welding consumable sector, enhancing customer relation.

Lincoln's growth has been driven largely by acquisitions. The recent acquisition is the prolongation of its strategy of extending product portfolio as well as customer base in the global arena.

The acquisition of Weartech is expected to complement Lincoln's operations in the North American segment. Earlier, Lincoln acquired welding operations of Maryland based Techalloy, Nevada based Applied Robotics Inc., popularly known by its brand name Torchmate and Southern California based Arc Products. These deals helped Lincoln increase the product portfolio in the U.S. market.

Lincoln carried out its global acquisition spree by extending its footprints in Russia and China. It has Russia based OOO Severstal-metiz and China based JinzhouJin Tai Welding and Metal Co., Ltd operating under its wings.

The demand for the products of Lincoln is on the rise, posting strong growth on the heels of an economic recovery and investments in the emerging markets. Lincoln, in the recently reported quarter delivered earnings of 66 cents per share, improving 69% from the prior year quarter and staying ahead of the Zacks consensus Estimate of 62 cents. Total revenue increased 35% year over year to $ 701.6 million, beating the Zacks Consensus Estimate of $664 million.

Currently, the shares of Lincoln retain a Zacks #1 Rank (short-term "Strong Buy" recommendation). It competes with the companies like Illinois Tool Works Inc. ( ITW ), Charter International Plc and ESAB Group Holdings Ltd.

Weartech is a privately held company which produces hard and wear-resistant welding consumables made of cobalt. It provides cobalt welding consumable goods to the high growth energy and process chemical segments through its plants in Anaheim and Port Talbot, Wales.

Based in Cleveland, Ohio, Lincoln Electric is a full-line manufacturer and reseller of welding and cutting products. The company's welding products range from welding power sources, wire feeding systems, robotic welding packages, fume extraction equipment, consumables and fluxes to regulators and torches used in cutting. The level of product technology varies from basic units employed in light manufacturing to sophisticated robotic applications used in high-production welding and fabrication.

ILL TOOL WORKS ( ITW ): Free Stock Analysis Report

LINCOLN ELECTRC ( LECO ): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

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.

In This Story


Other Topics