ST. LOUIS - Core & Main Inc. (NYSE: CNM), a U.S.-based distributor of water, wastewater, storm drainage, and fire protection products, has announced its expansion into the Canadian market through the acquisition of HM Pipe Products, Inc. and its affiliate HM Pipe Products Kitchener Inc., both Canadian distributors of water and wastewater products. This strategic move marks a significant milestone for Core & Main in extending its reach into the multibillion-dollar Canadian market.
The acquisition, which entails Core & Main taking over substantially all of the assets of HM Pipe Products, will leverage the local market expertise and established customer relationships of the Canadian firm to bolster Core & Main's service offerings in North America. HM Pipe Products has been a recognized provider in Ontario since its inception in 2010, operating from two locations in London and Kitchener.
Steve LeClair, Chair and CEO of Core & Main, expressed confidence in the combined expertise of the two companies to address Canada's infrastructure needs. Jack Schaller, President of Core & Main, echoed this sentiment, emphasizing the cultural and service alignment between the two entities.
Rick Henry, President of HM Pipe Products, shared his pride in the company's achievements and looked forward to the new opportunities that joining forces with Core & Main would bring. Both Henry and HM Pipe Products co-founder Fraser Metcalf expressed excitement about the partnership, anticipating enhanced support for the Canadian water and wastewater industry.
Core & Main, headquartered in St. Louis, operates over 350 locations across the U.S. and employs nearly 5,500 associates. The company is committed to providing local expertise supported by a national supply chain.
In other recent news, Core & Main, Inc. has been the subject of several significant developments. The company recently reported a strong first-quarter performance for fiscal year 2024, with net sales increasing by 11% to a record $1.74 billion. In response to these results, the company has raised its annual outlook for net sales and adjusted EBITDA.
Core & Main has also announced a share repurchase program authorizing a buyback of up to $500 million of its Class A common stock. This move reflects the company's confidence in its financial strength and commitment to delivering shareholder value.
In analyst news, Truist Securities revised its price target for Core & Main from $56.00 to $50.00, maintaining a Hold rating on the company's shares. This adjustment followed the company's recent financial results and management's remarks highlighting increasing price competition from smaller distributors. Conversely, RBC Capital Markets maintained its Outperform rating on shares of Core & Main, with a consistent price target of $60.00.
In other company news, Core & Main shareholders recently voted on several key proposals, including the election of directors and the approval of executive compensation. The appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the fiscal year ending February 2, 2025, was also ratified with a substantial majority.
InvestingPro Insights
As Core & Main Inc. (NYSE: CNM) sets its sights on the Canadian market with its recent acquisition of HM Pipe Products, the company's financial health and market performance provide valuable insights into its strategic moves. With a market capitalization of $10.02 billion, Core & Main positions itself as a significant player in the industry. The company's P/E ratio stands at 23.27, reflecting investor sentiment and market expectations of future earnings.
InvestingPro Data indicates a solid revenue growth of 3.65% over the last twelve months as of Q1 2023, demonstrating Core & Main's ability to expand its revenue streams. Additionally, the company has shown a strong return over the past year, with a 63.16% total price return, highlighting its robust market performance despite fluctuations.
InvestingPro Tips reveal that management's aggressive share buyback strategy could indicate confidence in the company's value and future prospects. Moreover, Core & Main's liquid assets surpassing short-term obligations suggests a strong liquidity position, which is critical for supporting its expansion endeavors, including the move into the Canadian market. For investors seeking deeper analysis and more exclusive insights, InvestingPro offers additional tips on Core & Main's financials and market performance. Use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and explore all the tips available at https://www.investing.com/pro/CNM.
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