Snap-On Buys Sturtevant Richmont To Drive Industrial Unit

Supplier of diagnostics systems and software, Snap-on Incorporated (NYSE:SNA) , recently announced that it has acquired torque wrench marker, Sturtevant Richmont, for $13 million in cash. This is Snap-On’s second strategic buyout in fourth-quarter 2016, after it entered into a definitive agreement to purchase Car-O-Liner, earlier in October.

Sturtevant Richmont Buyout

Carol Stream, IL-based firm – Sturtevant Richmont – is engaged in designing, manufacturing and distributing mechanical and electronic torque wrenches. With average annual sales of $10 million, Sturtevant Richmont has earned a solid reputation among clients for providing wireless, torque error proofing systems for a gamut of industrial applications.

Sturtevant Richmont will be integrated into Snap-On’s Commercial & Industrial Group to fortify its product line that uses torque applications. Snap-On believes that this strategic buyout will help it improve critical mechanical performance by addressing critical torque requirements.

Acquisitions to Stoke Growth

Of late, Snap-On has been diligently pursuing acquisitions to bolster its core businesses in key markets. About a month ago, it inked an agreement to buy Sweden-based firm – Car-O-Liner – for $155 million. This acquisition is expected to be conducive to the growth of the company’s Repair Systems & Information Group business, by boosting its stronghold in the auto as well as heavy duty markets. Snap-On perceives that this acquisition will go a long way in improving its relationship with repair shop owners and managers.

Snap-On has a long-standing winning streak, beating estimates each time over the past five years. The stock had an impressive rally on the bourse in the past three months, gaining 9.2% despite macroeconomic headwinds. Snap-On is committed to its rapid continuous improvement (RCI) program, designed to enhance organizational effectiveness and minimize costs. This program has been instrumental in fuelling sales, margins and savings in the recent quarters. With bullish prospects in most of its business lines, we believe that this Zacks Rank #2 (Buy) company has strong upside potential in the near future.

Other Stocks to Consider

Some other favorably placed stocks in the sector include Capella Education Co. (NASDAQ:CPLA) , Intrawest Resorts Holdings, Inc. (NYSE:SNOW) and Harman International Industries, Incorporated (NYSE:HAR) , each holding the same Zacks Rank as Snap-On. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Headquartered in Minneapolis, MN, Capella Education, through its wholly owned subsidiaries, provides online post-secondary education services in the U.S, focused primarily on working adults. The company has an excellent earnings surprise history, beating estimates all through over the trailing four quarters. It boasts an average positive surprise of 10.9%.

Intrawest Resorts Holdings operates as a mountain resort and adventure company which delivers vacation and travel experiences to its customers. The company managed to beat earnings twice in the trailing four quarters and has an average positive surprise of 2.2%.

Harman International is engaged in developing, manufacturing and marketing audio products and electronic systems. The company has topped estimates thrice in the trailing four quarters, with an average beat of 6.5%.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>