Colfax acquires Charter International
It’s now official: Colfax (NYSE: CFX) will acquire Charter International for $ bil 2.4 in cash and stock.
As the tournaround specialist Melrose withdraw its competing offer the way for Colfax is now clear!
Colfax makes one of its biggest steps forward as part of its acquistion and consolidation strategy.
Charter International has 2 divisions of international engineering. The Howden air and gas handling division and the ESAB welding, cutting and automation service.
Especially the ESAB division operates in a still very fragmented industry which Colfax considers ripe for consolidation. This will also be a completely new business sector and growth platform for Colfax.
Colfax estimates this deal to be accretive to earnings within 3 – 5 years and to deliver double digit return on invested capital.
So it can very well be that it will reduce earnings in the short term. Therefore the stock tanked when the first rumour of this deal appeared.
But consider this acquisition a bold move forward and don’t forget: Colfax has acquisition and integration experience as part of their business model.
… this blog follows Colfax since May 2009 when the share price stood at $ 7.27 .
Until today it performed 200 %!