Applied Industrial Technologies, Inc. AIT has inked a deal to acquire Hydradyne, LLC. The financial terms of the transaction have been kept under wraps.

Founded in Dallas, TX, Hydradyne specializes in fluid power and motion control systems. The company 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

This acquisition is in sync 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 AIT’s fluid power offerings. It will enable the company 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 #3 (Hold). In the past year, the company’s shares have gained 69.3% compared with the industry’s 33% 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.

Stocks to Consider

Some better-ranked companies 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%.

RBC Bearings Incorporated RBC presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 2.5%.

In the past 60 days, the consensus estimate for RBC’s fiscal 2025 earnings has increased 1.4%.

Kadant Inc. KAI presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 17.2%. 

The Zacks Consensus Estimate for KAI’s 2024 earnings has increased 1.8% in the past 60 days.

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