Markets
KOP

Praxair (PX) Boosts CO2 Business with Tecnogas Acquisition

A generic image of a stock chart
Credit: Shutterstock photo

Industrial gas producer and supplier Praxair Inc.PX recently acquired Tecnogas for an undisclosed amount. The acquired firm, based in Peru, is a producer and distributor of carbon dioxide and other industrial gases. The news primarily drove a 0.36% rise in the company's share price on Sep 24.

As revealed, the acquired firm has a diversified customer base of approximately 400 in various end-markets including food and beverage, healthcare and metal fabrication. In addition, the acquisition has added 3 carbon dioxide production facilities to Praxair's portfolio, enhancing its revenue generation capabilities by around $10 million.

Of late, Praxair has been focused on expanding its carbon dioxide production capabilities. Around a week ago, the company announced an agreement to acquire the European carbon dioxide business of Yara International ASA. Along with this, the company consented to purchase Yara's 34% stake in the Yara Praxair Holding AS industrial gas joint venture in Scandinavia. The twin transaction is reportedly valued at €312 million. Awaiting regulatory approvals, the transactions are anticipated to close in first-quarter 2016.

We believe such strategic acquisitions, over time, have enabled Praxair to foray into unexplored markets or expand in existing markets. Also, these additions reflect the company's sound cash position as well as its initiative to satisfy the growing needs for industrial gases and related services.

Despite the long-term positives, Praxair's exposure to certain near-term headwinds has weakened its investment value. Currently, the stock has a market capitalization of $28.9 billion and carries a Zacks Rank #4 (Sell). Some of the company's prime competitors are performing well, having gained high investment rankings. These stocks include Koppers Holdings Inc. KOP , Air Products & Chemicals Inc. APD and Koninklijke DSM N.V. RDSMY . While Koppers Holdings sports a Zacks Rank #1 (Strong Buy), both Air Products & Chemicals and Koninklijke DSM carry a Zacks Rank #2 (Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

PRAXAIR INC (PX): Free Stock Analysis Report

AIR PRODS & CHE (APD): Free Stock Analysis Report

KOPPERS HOLDNGS (KOP): Free Stock Analysis Report

KONINKLIJKE DSM (RDSMY): Free Stock Analysis Report

To read this article on Zacks.com 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

KOP APD RDSMY

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More