Middleby (MIDD) Acquires Synesso, Boosts Product Portfolio

The Middleby Corporation (NASDAQ:MIDD) announced that it acquired Seattle-based Synesso. The financial terms of the transactions have been kept under wraps.

Synesso is engaged in the designing and manufacturing of espresso machines (semi-automatic). These energy-efficient machines, with low maintenance costs, are mainly used in the commercial market. Synesso’s revenue generation capacity is $10 million.

The Synesso buyout is expected to strengthen Middleby’s product offering in the beverage and coffee platform. Notably, the company already supplies traditional carafe, automated bean to cup, nitro brew and cold brew machines. Middleby’s leading brands include JoeTap, Ss Brewtech and Concordia.

Middleby’s Inorganic Initiatives

We believe that the above-mentioned transaction is consistent with the company’s policy of acquiring businesses for attracting customers, and gaining access to various regions and product lines.

In November 2019, it acquired Redwood City, CA-based Brava Home Inc — a specialist in providing advanced technology for residential cooking. The buyout is expected to strengthen Middleby’s product offering in the commercial and residential businesses.

In July 2019, Middleby acquired Packaging Progressions, Inc. The buyout has been strengthening Middleby’s product offering related to processing technologies, with the addition of two products — ProLeaver and ProStax. Middleby acquired Santa Ana, CA-based Ss Brewtech in June. Further, it bought Cooking Solutions Group of Standex International Corporation (NYSE:SXI) and Newton, MA-based Powerhouse Dynamics, Inc in April 2019.

Notably, buyouts drove Middleby’s sales by 5.8% in the third quarter of 2019.

Zacks Rank, Earnings Estimates and Price Performance

Middleby, with a market capitalization of nearly $6.5 billion, currently carries a Zacks Rank #3 (Hold).

The company anticipates gaining from product innovation, improving selling techniques, solid customer offerings and growth markets. It also expects to benefit from various profitability actions. However, Brexit-related issues, weak spending by restaurant chains and issues related to the meat processing line of operations might play spoilsport.

The Zacks Consensus Estimate for Middleby’s earnings is pegged at $6.74 for 2019 and $7.43 for 2020, reflecting increases of 3.1% and 0.5% from the respective 60-day-ago figures.

The Middleby Corporation Price and Consensus