Middleby Buys CVP Systems To Boost Food Processing Platform
Zacks Investment Research | Jul 02, 2017 09:38PM ET
Premium diversified machinery company, The Middleby Corporation (NASDAQ:MIDD) , reinforced its inorganic growth trajectory by successfully acquiring CVP Systems Inc. (CVP Systems), for an undisclosed amount. The company noted that this deal would fortify its Food Processing Equipment Group’s business, moving ahead.
Inside the Headlines
CVP Systems manufactures high-speed packaging systems for the global meat processing industry. Bag machinery, meat packing & processing equipment, food wrappers, plastic sealers and weighing & packaging machinery are some major product categories offered by the company. CVP Systems is considered the worldwide leader of Modified Atmosphere Packaging. It is a unique packaging technology which helps in extending the shelf life of food, by removing air, and creating a more favorable packaging environment. This Downers Grove, IL-based company generates revenues worth $20 million, on an annualized basis.
The CVP Systems buyout will enhance Middleby’s Food Processing Equipment Group’s product portfolio, moving ahead. This segment provides a variety of products such as batch ovens, processing ovens, defrosting and packaging equipment. Middleby has been trying to strengthen the segment’s business inorganically, for the past few quarters, on the back of acquisition deals such as the Burford Corporation buyout (May 2017) and the Follett Corporation buyout (May 2016).
Why on Hold?
Headwinds such as adverse foreign currency translation impact, stiff industry rivalry or sudden price inflation might hurt the company’s near-term results. Over the last one month, Middleby’s shares lost 7.76%, wider than the loss of 0.23% incurred by the Zacks categorized Machinery-General Industrial industry.
However, amid such headwinds, this Zacks Rank #3 (Hold) stock is poised to grow on diligent acquisitions, sound restructuring moves and strategic innovation investments.
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Colfax Corporation (NYSE:CFX) has an average positive earnings surprise of 9.45% for the last four quarters and currently sports a Zacks Rank #1 (Strong Buy). You can see Original post
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