Terex Clears HSR Hurdle for Acquisition of ESG From Dover Corporation

Terex Corporation TEX has announced that the mandatory 30-day waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 related to its pending acquisition of Environmental Solutions Group (“ESG”) is over.  This marks an important step in the acquisition process, which will add a market leader in waste and recycling to Terex's portfolio. It will also enhance its financial profile, including revenues, free cash flow, EBITDA margin and earnings per share.Details of the Terex-Dover DealOn July 22, 2024, TEX and Dover Corporation DOV announced that they had inked a deal, per which Terex would acquire Dover’s ESG Group in a $2 billion all-cash transaction. Adjusted for the present value of expected tax benefits of approximately $275 million, the purchase price stands at $1.725 billion. Dover's ESG has several well-known product brands, including Heil, Marathon, Curotto-Can and Bayne Thinline. It has digital solutions offerings such as 3rd Eye and Soft-Pak.  ESG has a solid track record of consistent growth and witnessed more than 7% organic revenue CAGR over the last 10 years.Strategic Benefits of the Deal to TerexSolid Trends in Waste and Recycling: Terex expects the ESG deal to close later this year, subject to the satisfaction of customary non-regulatory closing conditions. It will form a new Environmental Solutions segment that includes ESG and its existing Utilities business. The addition of ESG will strengthen Terex's portfolio and cater to the growing waste, recycling and utility end markets that are expected to benefit from electrification, circularity and energy transition trends. Enhanced Product Portfolio, Market Share & Opportunities: ESG's turnkey products and services across equipment, digital and aftermarket offerings are complementary to Terex's product portfolio. Following the acquisition, its North American exposure will reach 65% and its global market opportunity will expand to $40 billion.Solid Financial Benefits: ESG's EBITDA margin, including run-rate synergies, is expected to boost Terex’s margins by 130 basis points. It will have approximately $1 billion in pro forma EBITDA.The deal is expected to boost Terex’s earnings by a double-digit percentage in 2025, with further gains expected thereafter.Around $25 million of identified synergies are expected by the end of 2026. This will stem from procurement, supply-chain efficiencies and commercial initiatives.Also, ESG's efficient operating model, combined with low net working capital, will improve Terex’s free cash flows.Price PerformanceTerex's shares have lost 14.4% over the past year against the industry’s 15.5% growth. Image Source: Zacks Investment ResearchTEX’s Zacks Rank & Stocks to ConsiderTerex currently carries a Zacks Rank #3 (Hold).Some better-ranked companies from the Industrial Products sector are Crane Company CR and Flowserve Corporation FLS, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for Crane’s 2024 earnings is pegged at $5.07 per share. The consensus estimate for earnings has moved 6% north in the past 60 days. The company has a trailing four-quarter average earnings surprise of 11.2%. CR’s shares gained 75.2% in a year.Flowserve has an average trailing four-quarter earnings surprise of 18.2%. The Zacks Consensus Estimate for FLS’ 2024 earnings is pinned at $2.76 per share, which indicates year-over-year growth of 31.6%. The consensus estimate for earnings has moved 4% north in the past 60 days. The company’s shares gained 27.5% in a year.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Terex Corporation (TEX): Free Stock Analysis Report Dover Corporation (DOV): Free Stock Analysis Report Flowserve Corporation (FLS): Free Stock Analysis Report Crane Company (CR): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks