STAMFORD, Conn. - ITT Inc. (NYSE:ITT), a manufacturer of highly engineered critical components and customized technology solutions, has finalized the acquisition of kSARIA Parent, Inc., a company specializing in connectivity solutions for the defense and aerospace sectors. The transaction, previously announced on August 1, 2024, was closed with a combination of a roughly $460 million term loan and cash on hand.
kSARIA is known for its engineered cable assemblies used in various applications including avionics, sensors, communications, and networking. The company's product offerings are seen as complementary to ITT’s existing connector portfolio. With a significant presence in the North American defense market, valued at nearly $7 billion and expected to grow steadily through 2028, kSARIA holds a competitive edge with 70% of its positions as sole or primary source suppliers.
The New Hampshire-based kSARIA, with a workforce of about 1,000 across six manufacturing sites in North America, reported sales of approximately $175 million in 2023. It now forms part of the ITT Connect & Control Technologies segment, which is known for producing connectors and control components that withstand harsh environments in aerospace, defense, and industrial applications.
ITT, with its global headquarters in Stamford, Connecticut, operates in more than 35 countries and sells in roughly 125 countries. This latest acquisition is part of the company's strategy to deliver sustainable solutions to industries essential to modern infrastructure.
The information regarding the acquisition is based on a press release statement from ITT Inc.
In other recent news, ITT Inc. continues to make strategic moves towards growth and expansion. The company has promoted Bartek Makowiecki to Senior Vice President, Chief Strategy Officer, and President of Industrial Process, aligning with ITT's focus on key business segments. Makowiecki's new role comes with increased compensation, reflecting his expanded responsibilities.
In terms of financial performance, ITT Inc. has reported a 9% revenue growth for the second quarter of 2024, largely driven by increased volumes and strategic acquisitions. The company's acquisitions included Svanehoj and kSARIA, a leader in fiber cable applications for defense contractors, which was purchased for $475 million. These acquisitions are part of ITT's growth strategy in high-margin sectors.
Furthermore, ITT's Industrial Process segment exceeded its long-term target margin of 20%, while the Motion Technologies and Connect & Control Technologies segments are nearing 19%. The company has also made significant strides in the green energy sector, securing key commercial contracts. Despite divesting Wolverine, ITT reaffirmed its full-year guidance for 2024, indicating confidence in its strategic moves and performance.
InvestingPro Insights
Following the recent acquisition of kSARIA Parent, Inc., ITT Inc. (NYSE:ITT) demonstrates its commitment to growth and expansion within the defense and aerospace sectors. InvestingPro data shows that ITT has a market capitalization of $10.91 billion, underlining its significant presence in the industry. Additionally, the company's price-to-earnings (P/E) ratio stands at 25.21, showcasing investor confidence in ITT's earnings potential despite it trading at a high P/E ratio relative to near-term earnings growth, which is a point to consider for potential investors.
ITT's strategic moves are further supported by its solid financial performance. The company's revenue growth over the last twelve months as of Q2 2024 was 9.74%, indicating a healthy expansion in its business operations. Furthermore, ITT's gross profit margin during the same period was a robust 33.91%, suggesting efficient cost management and profitability.
Investors may also find reassurance in ITT's dividend track record. One of the InvestingPro Tips highlights that ITT has raised its dividend for 11 consecutive years and has maintained dividend payments for 54 consecutive years. This consistency reflects ITT's financial stability and its commitment to shareholder returns. Moreover, cash flows from operations can sufficiently cover interest payments, which is an indicator of financial health and resilience.
For those interested in a deeper analysis, there are additional InvestingPro Tips available, including insights into ITT's debt levels, liquidity, and profitability forecasts for the year. Visit InvestingPro for a comprehensive list of tips and metrics to inform your investment decisions.
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