Valmont Industries Inc. ( VMI ) announced the acquisition of a 30,000 square-foot manufacturing plant of Katana Summit LLC. The acquired asset is located in Columbus and spreads across 75 acres of land. The financial terms of the acquisition remained undisclosed.
Katana Summit LLC manufactures and supplies wind turbine towers in North America. The goal of the company is to add long term and positive value to its customers, employees, stakeholders and communities.
Valmont intends to use the plant to manufacture steel transmission structures for the utility industry. With the addition of the plant, the company will benefit from increased manufacturing capacity. It expects the plant to have additional annual capacity of about $100 million by 2014.
Last month, Valmont released its third quarter 2012 results. The company logged third-quarter 2012 earnings of $2.12 per share, topping the Zacks Consensus Estimate of $2.06 and exceeding the prior-year earnings of $1.59. The fabricated metal product maker's profit surged 34.6% year over year to $56.7 million on higher revenues.
Revenues increased 8.6% year over year to $729.8 million, boosted by growth across all the segments, particularly the Utility Support Structures segment. However, sales missed the Zacks Consensus Estimate of $739.0 million.
Looking ahead, Valmont expects continued strength in its utility business in the remainder of 2012. It also expects healthy demand for irrigation equipments from farmers in the fourth quarter.
Valmont expects the demand in the Engineered Infrastructure Products and Coatings segments to remain relatively stable. Moreover, the company expects higher demand in the Utility Support Structures segment as well as strong demand for irrigation equipments based on increased firm income in 2013.
Valmont, which competes with Lindsay Corporation ( LNN ), maintains a Zacks #2 Rank, which translates into a short-term (1 to 3 months) Buy rating. We currently have a long-term Outperform recommendation on the stock.