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Altra Industrial to Collaborate With Fortive’s A&S Platform

Zacks

Altra Industrial Motion Corp. AIMC recently signed a definite agreement with Fortive Corporation FTV in order to merge with the automation and specialty (A&S) platform of the latter. This $3-billion deal will integrate Altra Industrial with four operating businesses of Fortive and not impose any tax burden over the companies’ shareholders.

Fortive Corporation’s A&S platform includes premium brands such as Portescap, Kollmorgen, Jacobs Vehicle Systems and Thomson. This arm of the company generated revenues of roughly $907 million and adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of $220 million in 2017.

Over the past year, Altra Industrial’s shares have appreciated 20.2%, almost in line with 20.5% growth registered by the industry.

The aforementioned agreement will make Altra Industrial the global leader in motion control and power transmission. It is anticipated to fortify the company’s technical know-how by combining its engineered power transmission’s electronic and mechanical capabilities with Fortive A&S platform’s robust software, electronic and electric content in precision motion control. Moreover, by collaborating with Fortive, Altra Industrial intends to gain exposure in new industries (like robotics and food & beverage) entailing secular growth dynamics.

This deal is also expected to double Altra Industrial’s aggregate revenues to nearly $1.8 billion and increase its EBITDA to roughly $350 million. Moreover, the combination is predicted to secure more than $1-billion cumulative five-year free cash flow.


The transaction, anticipated to close by the end of this year, is currently subject to customary closing conditions.

Zacks Rank and Stocks to Consider

Altra Industrial carries a Zacks Rank #3 (Hold). Two better-ranked stocks in the same space are listed below:

Applied Industrial Technologies, Inc. AIT sports a Zacks Rank of 1 (Strong Buy). The company’s earnings per share (EPS) are projected to grow 12% in the next three to five years. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dover Corporation DOV flaunts a Zacks Rank of 1. The company’s EPS is estimated to be rise 13% over the next three to five years.

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