RBC Bearings (ROLL) Buys Swiss Tool, Boosts Collets Business
Zacks Investment Research | Aug 15, 2019 09:34PM ET
RBC Bearings Incorporated (NASDAQ:ROLL) recently closed the buyout of Swiss Tool Systems AG for about CHF 33 million ($33.9 million) from Cross Equity Partners LLP and other private owners. Notably, the company will fund the transaction with cash on hand and debt.
Headquartered in Bürglen, Thurgau, Switzerland, Swiss Tools is a leading supplier of modular tooling systems throughout the world. Also, the company is a major supplier of high-precision boring and turning solutions for metal cutting machines.
Acquisition Rationale
Swiss Tools’ highly engineered products will augment the products offerings of RBC Bearings’ collets business. RBC Bearings already has a strong presence in collets and toolholders business in the United States and Europe, and this buyout will enable it to further strengthen customer base.
Moreover, the buyout integration process is likely to be seamless, with Swiss Tools’ manufacturing processes and design expertise complementing that of RBC Bearings.
Existing Business Scenario
RBC Bearings believes that expansion in international arenas, building of manufacturing capabilities and benefits from new contracts will boost sales from aerospace and defense markets. For second-quarter fiscal 2020 (ending September 2019), the company anticipates revenues to grow 4.1-5.3% year over year to $180-$182 million.
In the past three months, the Zacks Rank #3 (Hold) company’s share price has increased 15.6% against 4.3% decline recorded by the Zacks Investment Research
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