Nordson Spurs Fluid Management Business With LinkTech Buy

Precision dispensing equipment manufacturer Nordson Corporation (NASDAQ:NDSN) recently announced the acquisition of Ventura, CA-based LinkTech Quick Couplings, Inc. Financial terms of the transaction were kept under wraps.

As revealed, LinkTech Quick Couplings specializes in the manufacturing and distribution of highly engineered precision couplings and fittings for use in insufflation tubing sets, deep vein thrombosis, clinical instrumentation, compression cryotherapy, pulmonary equipment and several other applications. Product portfolio includes plastic couplings, metal couplings, polypropylene couplings, and plastic tubing connectors.

Nordson Corporation has financed the transaction through borrowing under its revolving credit facility. The company will integrate the acquired assets with its Advanced Technology Systems segments’ Nordson Medical product line. The company anticipates that the acquisition will compliment its fittings and connectors product line as well as strengthen its work force with the addition of 30 skilled workers.

Nordson Corporation‘s share price has gained roughly 1.4% since the announcement of the deal on Sep 1.

We believe the acquisition is consistent with Nordson’s expansionary policy. In third-quarter fiscal 2016 (ended Jul 31, 2016), benefits from acquired assets added 2% to revenue growth, while the same is predicted to contribute 1% in the fourth quarter. The company anticipates total sales to grow 6−10% year over year in the quarter, including organic growth of 5−9%. Earnings are expected within $1.15−$1.27 per share.

Zacks Rank & Other Stocks to Consider

With a market capitalization of nearly $5.8 billion, Nordson Corporation currently sports a Zacks Rank #1 (Strong Buy). Other similarly ranked stocks in the machinery industry include DXP Enterprises, Inc. (NASDAQ:DXPE) , Tennant Company (NYSE:TNC) and Gorman-Rupp Co. (NYSE:GRC) .

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