Gibraltar Buys Thermo Energy, Fortifies Commercial Greenhouse
Zacks Investment Research | Jan 19, 2020 09:18PM ET
Gibraltar Industries, Inc. (NASDAQ:ROCK) announces the acquisition of Canada-based Thermo Energy Systems, which will enable it to penetrate into the biologically-grown organic food market.
Benefits of the Buyout
Thermo Energy — now part of Gibraltar’s Renewable Energy and Conservation segment — is a commercial greenhouse service provider located in Kingsville.
Thermo Energy supplies and installs greenhouse heating and cooling systems, irrigation systems, CO2 systems, hot water storage tanks, boiler install and service, greenhouse carts, custom stainless-steel kitchens in bunkhouses as well as fabrication of greenhouse structures.
Courtesy of its best-in-class execution, experience and domain knowledge, Thermo Energy is expected to contribute annual revenues of approximately $75 million. The acquisition is expected to be accretive for 2020.
Focus on Commercial Greenhouse Solutions
Biologically-grown organic food market, with more than $1-billion prospects, has been growing at a mid- to high- single digit rate on the back of rising consumer demand.
“Thermo’s experience and domain knowledge in commercial growing further expands our leadership position in the design, manufacture, installation and systems integration for our customers in the biologically-grown organic food market,” stated Gibraltar Chief Executive Officer, William Bosway.
Strong demand for its commercial greenhouse growing solutions has been driving Gibraltar’s performance. During the third quarter of 2019, the Renewable Energy and Conservation segment delivered robust revenue performance. Revenues in the segment increased 18.6% year over year to $116.8 million, with organic growth of 11.3%.
The uptick can be attributed to strong demand for its commercial greenhouse growing solutions as well as contributions from the acquisitions of SolarBos (completed in the year-ago quarter) and Apeks Supercritical (in third-quarter 2019).
Meanwhile, segment backlog increased 72% year over year on strong end-market activity and enhanced new business bidding activities.
Price Performance
Shares of Gibraltar have surged 47.3% in the past year compared with the Original post
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