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Chart Industries, Inc. GTLS, yesterday, announced that it completed the acquisition of Worthington Industries, Inc.’s WOR cryogenic trailer and hydrogen trailer business in Theodore, AL. The acquisition price has not been disclosed yet.
It is worth mentioning here that Chart Industries’ shares gained 3.1% yesterday, closing the trading session at $75.31.
Worthington is engaged in steel processing and manufacturing laser welded products. Also, the company supplies pressure cylinders and products that are used in outdoor living, fuel storage, water systems and other applications. Its customers are from multiple end markets, including energy, transportation, agriculture, construction, industrial and retail.
Details of the Buyout
As disclosed, the acquired assets include Worthington’s manufacturing site in Alabama as well as its repair backlog, intellectual property related to trailer and equipment. Also, Worthington’s workforce related to the acquired assets and manufacturing capabilities will be an added advantage for Chart Industries.
Notably, packaging and assembly services related to liquid hydrogen trailers provided by Worthington will complement Chart Industries’ expertise in storage and handling of liquid hydrogen and cryogenics. Also, the acquired trailer business will add more value to Chart Industries’ equipment and solution (related to hydrogen) offerings.
Chart Industries anticipates the acquired assets to generate revenues (hydrogen-related) of $15-$20 million in 2021. The revenue generation might expand to $30 million in the year.
Chart Industries’ Buyout Activities
The company believes in acquiring businesses/assets in an attempt to gain access to new customers, regions and product lines. In the first half of 2020, it refrained from any buyout activities, while invested $603.9 million in acquisitions in 2019.
Notably, Chart Industries acquired the Industrial Air-X-Changers business of Harsco Corporation HSC in July 2019. The acquired assets are now part of Chart Industries’ Energy & Chemicals FinFans segment. The segment’s revenues declined 11.7% year over year to $64.1 million in the second quarter of 2020.
Zacks Rank, Earnings Estimate and Price Trend
With a market capitalization of $2.6 billion, Chart Industries currently carries a Zacks Rank #5 (Strong Sell).
The Zacks Consensus Estimate for Chart Industries’ earnings is pegged at $2.52 for 2020 and $3.12 for 2021, reflecting a decline of 20% and 21.8% from the respective 60-day-ago figures. Also, the consensus estimate for the third quarter has been lowered by 30.8% to 63 cents during the same timeframe.
Chart Industries, Inc. Price and Consensus
In the past three months, Chart Industries’ shares have gained 41.5% compared with the industry’s growth of 11.2%.
Another Industry Player With Buyout Activities
Another company, belonging to the same industry, Ingersoll Rand Inc. IR acquired Montelimar, France-based Albin Pump SAS in September 2020.
Notably, the addition of Albin Pump to Ingersoll’s portfolio will strengthen the company’s efforts to expand its offerings in the fluid management arena and enhance its technical capabilities. Further, Albin Pump’s solid customer base and its presence in multiple end markets will prove to be a boon for Ingersoll.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.