Colfax got a lot bigger!
Colfax (NYSE: CFX) the „fluid handling company” got a lot bigger!
Colfax on January 13th 2012 completed the acquisition of Charter plc.
To remember: This is the biggest acqisition for the still relatively young Colfax Corp. The price for this acquisition was $2.4 bil and was financed as a debt/equity deal.
This acquisition ads 2 totally new business lines to Colfax:
– ESAB cutting and welding and
– Howden which furnishes precision air and gas handling equipment
So no wonder that this topic dominated the FY 2011 Earnings Conference Call. The replay you can find on the company’s Investor Relations website.
Colfax already charged acquisition costs of more than $25 mil in Q4 2011 and therefore swung to a loss.
But the existing business performed rather well in this difficult economic environment:
operating margin was up 1,6 % in FY 2011 reflecting productivity improvements. Bookings were up 28% or 12% organically.
Don’t forget that Colfax thanks to its „Colfax Business System” is in a sort of permanent resstructuring mode.
In the 2 acquired new business lines they are already at work cutting costs. They want to cut them by at least $ 100 mil over the next 3 – 5 years in order to reach a double digit ROIC within this time frame and an improvement of the operating margin every year!