Industrial technology company Acuity Brands Inc. (AYI) inked a deal to acquire ams OSRAM’s Digital Systems (DS) business in North America. The transaction is expected to close in the summer of 2021.
The acquired business provides lighting components such as LED drivers, LED light engines, and electronic ballasts, and is one of the biggest LED lighting driver companies in North America.
Trevor Palmer, President, Acuity Brands Lighting and Controls business said, “We look forward to serving ams OSRAM’s North American DS business customers and providing our industry with the most advanced portfolio of integrated digitally connected luminaire technology and LED drivers.” (See Acuity Brands stock analysis on TipRanks)
The acquisition is expected to offer a strategic fit and perspective to Acuity’s customers and associates, while also expanding the company’s capabilities and advanced LED driver portfolio.
On May 19, Oppenheimer analyst Christopher Glynn reiterated a Buy rating on the stock with a price target of $205 (10.7% upside potential).
Glynn commented, “As AYI continues to leverage industry-best scale and SKU breadth to reinforce channel leadership (notably in independent agency channel, with some share potential related to recent industry consolidation) through better product cycle execution, we believe core ABL supports improved valuation, especially with substantial earnings leverage to any expedited cyclical upside. Leadership in UV light disinfection solutions may also generate incremental momentum.”
Consensus among analysts is that Acuity Brands is a Moderate Buy based on 5 Buys and 2 Holds. The average analyst price target of $182.17 implies the stock is almost fairly priced at current levels.
Shares have gained 54.1% so far this year.
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