Metal processor Worthington Industries, Inc. ( WOR ) has entered into an agreement with Steffes Corporation to acquire its tank manufacturing division for an undisclosed price. Steffes is an oilfield storage tank manufacturing company catering to the customers drilling in the Bakken shale and Williston Basin. In 2013, the business generated $25 million in revenues.
The acquisition is a strategic fit for Worthington as it is expected to enhance its energy business by adding the exposure to Bakken shale, one of the most oil-rich areas in the country. The acquisition will expand Worthington Industries' customer reach and help to better serve its customers in the east, central and also in the northwest region of the U.S.
Steffes' tank manufacturing facility, located in Dickinson, ND and presently employing 35 workers, was started in 2007. The additional capacity will uplift Worthington's existing operations in Ohio and Kansas that manufacture steel and fiberglass storage tanks, gas separators, gas production units and related wellhead equipment for oil and gas exploration customers in the Marcellus, Utica, Bakken and Mid-Continent regions.
Worthington posted its third-quarter fiscal 2014 (ended Feb 28, 2014) results on Mar 27. The company posted a profit of $40.6 million or 57 cents per share in the quarter, up 9.6% from $37.1 million or 52 cents a year ago.
Revenues rose 25% year over year to $773.2 million in the quarter from $619.5 million recorded in the prior-year quarter. The top line was driven by higher volumes stemming from acquisitions. The company saw strength across its Steel Processing and Pressure Cylinders divisions in the quarter.
Worthington remains positive about fourth-quarter fiscal 2014 and continues to expect solid performance to complete the fiscal year 2014. It also anticipates growth both organically and from acquisitions.
Worthington currently retains a Zacks Rank #3 (Hold).
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