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Middleby to Fortify European Presence with $200M AGA Buy - Analyst Blog

Premium diversified machinery company Middleby Corp.MIDD has agreed to acquire renowned consumer goods company AGA Rangemaster Group plc ("AGA") for $200 million. The transaction, which is expected to close by the end of third-quarter 2015, will help Middleby fortify its residential kitchen equipment business. It will start contributing toward the company's earnings from 2016 onward.

U.K.-based AGA is a renowned producer of residential kitchen equipments such as ovens, ranges and other refrigerating machines. It owns popular brands such as Falcon, La Cornue, Mercury, Rangemaster, Marvel and Stanley. The company generates annual revenues worth roughly $400 million.

As per Middleby's latest proclamation, it would offer £1.85 per share in cash for the acquisition, accomplishing the transaction through a $1 billion revolving credit capacity. Morgan Stanley MS would be the chief financial advisor of the deal, while Arps, Skadden, Slate, Meagher & Flom LLP would serve as other legal advisory firms.

Middleby provides cooking, warming, food preparation and packaging equipment to commercial, industrial processing and residential markets. The company offers its services through three major segments, Commercial Foodservice Equipment Group, Food Processing Equipment Group and Residential Kitchen Equipment Group. We believe that Middleby's strategic association with AGA would reinforce the former's existing product portfolio, brand status, revenues and margins in the near future. More importantly, the purchase will help Middleby expand its foothold in Europe.

Stocks to Consider

Middleby currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include AO Smith Corp. AOS and Apogee Enterprises, Inc. APOG . Both stocks hold a Zacks Rank #2 (Buy).

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MORGAN STANLEY (MS): Free Stock Analysis Report

SMITH (AO) CORP (AOS): Free Stock Analysis Report

APOGEE ENTRPRS (APOG): 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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