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Actuant Shuffles Energy Wing With Viking Sale, Mirage Buyout


Machinery company Actuant Corporation ATU announced that it has successfully divested its Viking SeaTech business to Acteon Group Limited and acquired Mirage Machines, Ltd. from the same. Both these transactions were originally announced on Aug 16.

Viking SeaTech business was part of Actuant’s Energy segment and primarily delivered mooring solutions in the offshore oil & gas exploration, drilling and well development end markets. On the other hand, Mirage Machines manufactures industrial and energy maintenance tools.

Details of the Twin Transactions

As noted, the Viking SeaTech business generated roughly $20 million revenues in the trailing 12 months. Actuant received proceeds of approximately $12 million from Acteon for this divestment.

For Mirage Machines acquisition, the company paid roughly $16 million to Acteon and promised additional consideration based on future performance.

In fiscal 2017 (ended August 2017), Actuant recorded impairment and divestiture related charges of $117 million while predicts to incur $15-$20 million of these charges in second-quarter fiscal 2018.

Benefits From the Transactions

In fourth-quarter fiscal 2017, Actuant’s Energy segment’s sales totaled $68.6 million, decreasing 24.9% year over year. Core sales dipped 25% year over year. Poor upstream offshore oil & gas demand and lower sales accrued from the company’s Hydratight business, dented the segment’s sales in the quarter.

Actuant believes that both these transactions were in sync with its intention of streamlining its Energy business to provide superior benefits to shareholders. The Viking divestment will limit the company’s exposure to upstream, offshore oil & gas markets while the addition of Mirage Machines will broaden product offerings in the flange facing and hot tapping categories. Specifically, the buyout will complement the Energy segment’s Hydratight business and create rental and service business opportunities.

In a month, the company’s shares have yielded 4.1% return, outperforming 2.6% gain of the industry.

Zacks Rank & Other Stocks to Consider

With a market capitalization of nearly $1.6 billion, Actuant currently carries a Zacks Rank #2 (Buy). The stock’s Zacks Consensus Estimate is currently pegged at $1.08 per share for fiscal 2018 (ending August 2018) and at $1.32 for fiscal 2019. These estimates represent year-over-year growth of 30.3% for fiscal 2018 and 22.2% for fiscal 2019.

Actuant Corporation Price and Consensus

Actuant Corporation Price and Consensus | Actuant Corporation Quote

Other stocks worth considering in the machinery industry include Kennametal Inc. KMT, Stanley Black & Decker, Inc. SWK and Altra Industrial Motion Corporation AIMC. While Kennametal sports a Zacks Rank #1 (Strong Buy), both Stanley Black & Decker and Altra Industrial Motion carry a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kennametal’s earnings for fiscal 2018 and fiscal 2019 improved in the last 60 days. Also, the company pulled off an average positive earnings surprise of 20.56% in the last four quarters.

Stanley Black & Decker delivered an average positive earnings surprise of 4.26% in the last four quarters. Also, its earnings estimates for 2017 and 2018 improved in the last 60 days.

Altra Industrial Motion’s financial performance was impressive, with an average positive earnings surprise of 17.30% in the last four quarters. Also, earnings estimates for 2017 and 2018 were revised upward over the last 60 days.

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