IDEX Snaps Up Airtech for $470M


Applied solutions provider IDEX Corp. (IEX) has agreed to purchase Airtech Group Inc., US Valve Corp., and associated entities for a consideration of $470 million from investment funds that are managed by EagleTree Capital.

IDEX expects this transaction to close by the end of 2Q.

Airtech provides a broad range of engineered pressure technology products such as vacuum pumps, regenerative blowers, compressor systems, and valves. Its end markets include alternative energy, food processing, medical, packaging, and transportation.

IDEX CEO and President Eric Ashleman said, “The acquisition of Airtech expands our expertise in specialized, high-performing air moving technologies, increasing our ability to serve customers’ needs.”

Ashleman added, “Airtech has an excellent record of providing highly engineered solutions for niche applications across a wide array of industries. We expect this acquisition to be an outstanding fit for IDEX.” (See IDEX Corp stock analysis on TipRanks)

What’s more, the company is actively seeking avenues to deploy capital, according to Ashleman. IDEX is also looking to strategically acquire new-age technologies that will enhance the company’s growth while also strengthening its product portfolio.

Yesterday, IDEX came out with its 1Q numbers. On the back of improving margins, its non-GAAP EPS of $1.51 came in ahead of the $1.41 consensus estimate. In addition, the company reported a 9.7% year-on-year jump in revenue to $652.04 million and beat analysts’ estimates of $634.85 million. The growth in revenue was attributable to higher orders as well as improved market conditions.

On April 27, Oppenheimer analyst Bryan Blair reiterated a Hold rating on the stock but did not assign any price target.

Commenting on the company’s 1Q performance, Blair said, “1Q demonstrated continued solid execution from the IDEX team with strong order and sales trends levered by accelerating M&A investment.”

Overall, consensus on the Street is that IDEX Corp. is a Strong Buy, based on 5 Buys and 1 Hold. The average analyst price target of $231.40 implies just 2% upside potential. Shares have gained about 44.7% over the past year.

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