Applied Industrial Technologies, Inc. AIT recently completed the acquisition of Hydradyne, LLC. The financial terms of the transaction have been kept under wraps.

Based in Dallas, TX, Hydradyne provides various products and services, including system design, fabrication, assembly, installation, repair and support for critical stationary and mobile equipment in various industrial and commercial sectors. It employs approximately 500 personnel across 33 locations in the Southeastern United States.

Acquisition Rationale of AIT

The recent acquisition aligns with AIT’s policy of acquiring businesses to strengthen its business and expand its product portfolio and market share. The inclusion of Hydradyne’s technical expertise will bolster the company’s fluid power offerings. It will enable AIT to create cross-selling opportunities and expand its footprint in the strategic Southeast U.S. region.

Applied Industrial expects the buyout to be cash-earnings per share accretive in the first 12 months of possession. The transaction is also expected to add $260 million in sales and $30 million in EBITDA.

Other Notable Acquisitions of AIT

In May 2024, Applied Industrial acquired Grupo Kopar, thereby enhancing its automation position in North America. The acquisitions of Bearing Distributors and Cangro (September 2023) enhanced the company’s footprint and strategic growth initiatives across the U.S. Southeast and upper Northeast regions.

The Advanced Motion Systems Inc. (April 2023) buyout expanded the company’s footprint in the upper Northeast region of the United States while helping to bolster relationships with leading suppliers.

AIT’s Zacks Rank and Price Performance

AIT currently carries a Zacks Rank #2 (Buy). In the past year, the company’s shares have gained 43.2% compared with the industry’s 11.5% growth.

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Applied Industrial is benefiting from an improving product line and value-added services, particularly from the increasing demand across the U.S. manufacturing sector for its fluid power MRO services. Acquired assets are another positive factor driving the company’s top line. Strength across the food and beverage, primary metals, utilities and transportation end markets sparks optimism.

Other Stocks to Consider

Some other top-ranked companies from the same space are discussed below.

Graham Corporation GHM currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

GHM delivered a trailing four-quarter average earnings surprise of 101.9%. In the past 60 days, the Zacks Consensus Estimate for Graham’s fiscal 2025 earnings has increased 8.4%.

Gates Industrial Corporation plc GTES currently carries a Zacks Rank #2. GTES delivered a trailing four-quarter average earnings surprise of 11.8%.

In the past 60 days, the Zacks Consensus Estimate for Gates Industrial’s 2024 earnings has remained unchanged.

Generac Holdings Inc. GNRC presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 10.8%. 

The Zacks Consensus Estimate for GNRC’s 2024 earnings has increased 1% in the past 60 days.

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Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report

Graham Corporation (GHM) : Free Stock Analysis Report

Generac Holdings Inc. (GNRC) : Free Stock Analysis Report

Gates Industrial Corporation PLC (GTES) : Free Stock Analysis Report

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