Timken Buys Smith Services Assets - Analyst Blog
April 15 2013 - 8:20AM
Zacks
The Timken Company
(TKR), a producer of anti-friction bearings and steel, recently
acquired the assets of privately held Smith Services Inc. The value
of the acquisition was not made public.
Based in Princeton, W.Va., Smith
Services is an electric motor repair specialist. The company
repairs and rewinds 200 to 3,500 horsepower range electric motors
along with undertaking on-site analysis and repairs.
Smith Services has its operations
scattered over seven states in the region, where it serves the
power generation, paper, steel, petrochemical, nuclear and mining
markets.
The repair business of Smith
Services complements that of Timken, making it easier to integrate
the two. This acquisition of Smith Services is expected to help
Timken expand its reach geographically as well, considering that
Smith Services is located at the heart of the industrial region,
Princeton.
Timken has been following a
strategy of expanding regionally. This acquisition is regarded as a
step ahead in the process, following the acquisition of Wazee
Companies, LLC, last year.
Revenue from the acquired company
will become a part of The Timken Company's Process Industries
segment. Reportedly, Smith Services generated revenues of ~$17.0
million in 2012, whereas Timkenās Process Industries segment
reported revenues of $1.3 billion during the same time.
Although the combined effects of
the acquisition on sales and earnings are yet to be ascertained, we
expect the acquisition to be a strategic fit for Timken.
Timken is scheduled to release its
first quarter 2013 results on Apr 24. The current Zacks Consensus
Estimate stands at 80 cents for the quarter, representing a
year-over-year decline of 49.1%.
Other stocks worth a look in the
industry are NSK Ltd. (NPSKY), carrying a Zacks
Rank #1 (Strong Buy); whereas Kaydon Corporation
(KDN) and Worthington Industries Inc. (WOR) carry
a Zacks Rank #2 (Buy) each.
KAYDON CORP (KDN): Free Stock Analysis Report
NSK LTD -UN ADR (NPSKY): Get Free Report
TIMKEN CO (TKR): Free Stock Analysis Report
WORTHINGTON IND (WOR): Free Stock Analysis Report
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