Valmont Acquires Locker Group - Analyst Blog

By Zacks | February 08, 2013 AAA

Valmont Industries, Inc. (VMI) has acquired Australia-based Locker Group Holdings Pty Ltd for an undisclosed price. Market leader in Australia and Asia, Locker Group has annual sales of nearly $80 million and possesses five manufacturing locations across the region. Valmont anticipates the buyout be to slightly accretive to its 2013 earnings after considering the transaction costs.

Locker Group, a privately held company, manufactures perforated and expanded metal for the non-residential market, industrial flooring and handrails for the access systems market, and screening media for applications in the industrial and mining sectors.

The acquisition strengthens Valmont's position in the access systems market and also provides exposure in the perforated and expanded metal products markets. Valmont intends to leverage Locker Group's product and marketing teams for expanding further in the Asia-Pacific region.

Valmont, In Jan 2013, also acquired certain assets of Ontario, Canada-based Pure Metal Galvanizing. Pure Metal, which has annual sales of roughly CAD$34 million ($34.4 million), is a market leader in custom hot dip galvanizing in Canada. It operates five kettles out of three locations in Ontario. The terms of the buyout were not disclosed.

The purchase of the Canadian galvanizing operations reinforces Valmont's global galvanizing business. The company sees the acquisition to be modestly accretive to its earnings in 2013. Valmont Industries, which is among the prominent steel-pipe and tube companies along with MRC Global Inc. (MRC), Synalloy Corp. (SYNL) and Tenaris SA (TS), reported impressive third-quarter 2012 results in Oct 2012 with both revenues and adjusted earnings exceeding the Zacks Consensus Estimates.

Valmont expects continued strength in its utility business. It also sees healthy demand for irrigation equipments from farmers in the fourth quarter. The company expects to post double-digit earnings growth in 2012 despite the European slowdown.

Valmont, which has a short-term Zacks Rank #2 (Buy), will report its fourth-quarter 2012 results on Feb 13.

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