MILWAUKEE - Enerpac Tool Group Corp. (NYSE: NYSE:EPAC), a global provider of industrial tools and solutions, has announced the completion of its acquisition of DTA The Smart Move, S.A., a Spanish leader in the industrial heavy loads transportation sector. The transaction, valued at €24 million with an additional earn-out potential over three years, was finalized today, according to the company's press statement.
DTA, based in Madrid, specializes in designing and manufacturing mobile robotic solutions for the transportation of heavy industrial loads. This acquisition is expected to complement Enerpac's Heavy Lifting Technology (HLT) portfolio by adding automated horizontal movement products, aligning with the trend towards increased industrial automation.
The purchase, funded through cash reserves and credit facility borrowings, is anticipated to bolster Enerpac's offerings in its existing vertical markets, which include rail, wind, infrastructure, aerospace, and nuclear sectors. For the fiscal year 2025, DTA is projected to generate around €20 million in revenue and is likely to have a neutral impact on Enerpac's adjusted earnings per share, excluding one-time transaction costs and before synergy accounting.
Paul Sternlieb, President and CEO of Enerpac Tool Group, expressed optimism about the acquisition, stating that the integration of DTA's products and expertise will allow Enerpac to serve a wider range of customer needs and create shareholder value.
Enerpac Tool Group, established in 1910 and headquartered in Wisconsin, operates in over 100 countries, providing high-pressure hydraulic tools, controlled force products, and heavy load positioning solutions. DTA, founded in 1972 and selling to over 50 countries, brings a history of innovation in self-propelled transporters capable of handling loads ranging from one to 1,200 tons.
The forward-looking statements in the press release are subject to risks and uncertainties that could affect actual results, including economic conditions and market acceptance. This acquisition is part of Enerpac's broader strategy to grow through strategic purchases and expand its global reach.
In other recent news, Enerpac Tool Group has declared an annual cash dividend for its Class A common stock, with shareholders set to receive a dividend of $0.04 per share. The company has also reported a modest organic revenue growth in the third quarter of fiscal 2024, despite facing some regional challenges. A significant increase in e-commerce revenue and the successful launch of a new e-commerce site in Europe were key contributors to the company's performance.
In the midst of these developments, Enerpac Tool Group has appointed Eric Chack as its new Executive Vice President of Operations. Chack, who brings a wealth of experience from senior positions at Mohawk Industries (NYSE:MHK), Briggs & Stratton, SPX Corporation, and IDEX (NYSE:IEX) Corporation, will focus on enhancing the company's operational efficiency and competitive edge.
In the earnings call, Enerpac Tool Group confirmed a full-year organic revenue growth projection of 2-3% and an adjusted EBITDA of $147-150 million. Despite a revenue decline in the Americas and challenges in the Asia-Pacific region, the company maintains a 6-7% organic revenue CAGR growth projection through fiscal '26. These recent developments underscore the company's resilience and strategic adaptability amidst market challenges.
InvestingPro Insights
As Enerpac Tool Group Corp. (NYSE: EPAC) solidifies its position in the industrial automation sector with the strategic acquisition of DTA, the company’s financial health and market performance provide a reassuring backdrop for investors. Enerpac boasts a robust gross profit margin of 51.37% over the last twelve months as of Q3 2024, underscoring the company's efficiency in managing its production costs and maintaining profitability.
The company's commitment to shareholder returns is evident, with a track record of 20 consecutive years of dividend payments, a testament to its financial stability and prudent capital management. This consistency in returning value to shareholders aligns with the positive outlook following the DTA acquisition. Additionally, Enerpac's market capitalization stands at $2.17 billion, reflecting investor confidence in its business model and growth prospects.
With a P/E ratio of 26.05 and an adjusted P/E ratio of 23.56 for the last twelve months as of Q3 2024, Enerpac is trading at a valuation that suggests investor optimism about its near-term earnings growth. This is further supported by the company's impressive return on assets of 10.83% during the same period, indicating efficient use of its assets to generate profits.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available, which highlight Enerpac's financial strengths and market potential. Among these tips, one notes that Enerpac has a perfect Piotroski Score of 9, signaling high financial health, and another points out the company's high return over the last year, with a year-to-date price total return of 28.4% as of the data cutoff date. To explore these insights and more, interested readers can visit InvestingPro for a comprehensive list of tips to inform their investment decisions.
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