DXP Enterprises (DXPE) Concludes Buyout Of Turbo Machinery

DXP Enterprises, Inc. (NASDAQ:DXPE) recently announced that it has completed the buyout of Turbo Machinery Repair, Inc. As noted, the company used its cash balance to fund the transaction. However, terms of the deal have been kept under wraps.

Founded in 1986, Turbo Machinery Repair is engaged in providing repair and value-added services to power, chemical, oil refineries, municipal, food processing and other industries. The Richmond, CA-based firm employs about 23 people.

Acquisition Rationale

The move complements DXP Enterprises’ buyout of Cortech Engineering, LLC — a major distributor of pumps and related process equipment — in September 2015. The deal allowed the company to expand its market share in municipal waste-water treatment, water treatment and desalination.

As noted by DXP Enterprises, the Turbo Machinery Repair buyout will enable it to strengthen its portfolio of rotating equipment solutions for oil and gas and manufacturing equipment markets. The addition of a strong pump repair facility in Northern California will facilitate the company in serving a stronger customer base.

Another notable inorganic move made by the company was the buyout of Application Specialties, Inc. (January 2018), a major distributor of abrasives, cutting tools, coolants and machine shop supplies. Notably, this buyout has helped DXP Enterprises to strengthen its offerings within the metal working product portfolio.

Zacks Rank & Price Performance

DXP Enterprises, which has a market cap of roughly $620.9 million, currently carries a Zacks Rank #3 (Hold). In the past six months, the company’s shares have returned 4.4% compared with the industry’s growth of 17.1%.

Stocks to Consider

Some better-ranked stocks from the same space are Graco Inc. (NYSE:GGG) , Barnes Group, Inc. (NYSE:B) and Tennant Company (NYSE:TNC) . While Graco sports a Zacks Rank #1 (Strong Buy), Barnes Group and Tennant carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Graco delivered positive earnings surprise of 0.40%, on average, in the trailing four quarters.

Barnes Group pulled off positive earnings surprise of 4.21%, on average, in the trailing four quarters.

Tennant delivered positive earnings surprise of 28.65%, on average, in the trailing four quarters.

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