Progressing with the efforts to streamline its business portfolio, Myers Industries Inc. MYE yesterday sold WEK Industries Inc., which formed a part of its Engineered Products Segment, to Industrial Opportunity Partners for nearly $19.5 million. Industrial Opportunity Partners owns Toledo Molding and Die Inc.
The sale included WEK Industries' manufacturing facilities and offices located in Jefferson, OH, and Reidsville, NC. WEK Industries primarily sells custom blow molded plastic parts for the automotive industry. The unit delivered annual net sales of about $36 million in 2013 for Meyers Industries.
Myers Industries' strategy of simplifying its business portfolio is based on the expansion of its leadership position in the Material Handling Segment while preserving a strong market position in the Distribution Segment.
In an attempt to develop its Material Handling segment, earlier this month, the company penned a deal to acquire Scepter Corporation and Scepter Manufacturing LLC (Scepter). This acquisition, comprising warehouses, manufacturing facilities and offices in Oklahoma, Scarborough, Miami and Ontario, is expected to hike the segment's sales by 30%. Myers expects the acquisition worth $165.0 million to close within a month.
Scepter is a leading manufacturer of molded plastic material handling products for various markets including marine, industrial, consumer and military. The company generated net sales of about $100.0 million in 2013 and is renowned for its state-of-the-art mold capacities and in-house product engineering facilities.
The acquisition of Scepter is expected to enable Myers to strengthen its foothold in the Material Handling segment and extend its global reach. The deal is also expected to enhance its assortments and position the company well for long-term growth in the nascent markets.
Simultaneously, the company initiated the sale of its distressed Lawn & Garden Segment in order to concentrate on operations with growth prospects. The sale is expected to close within a year.
Taking into consideration all these transactions, the company has decided to realign its reporting segments from four to two. The company will now on report operating results in two segments namely Material Handling and Distribution from the second quarter of fiscal 2014 10-Q filing. Previously, the company's reportable segments included Material Handling, Lawn & Garden, Distribution and Engineered Products.
Following the sale of WEK Industries and as part of the realignment, the company dissolved its Engineered Products Segment and split up the remaining businesses in the segment namely, Patch Rubber Company and Ameri-Kart Corp., into its Distribution and Material Handling Segments, respectively.
The new Material Handling Segment will now comprise industry leading brands like Buckhorn Inc., Akro-Mils, Novel, Myers do Brazil, Jamco Products Inc., Ameri-Kart, and Scepter, after conclusion of the recent acquisition deal.
The new Distribution Segment will include Myers Tire Supply, Myers Tire Supply International, and Patch Rubber Company.
Other Stocks to Consider
Myers Industries currently has a Zacks Rank #3 (Hold). A better-ranked stock in the rubber & plastics industry is Proto Labs Inc. PRLB with a Zacks Rank #1 (Strong Buy). Other better performing stocks in the broader retail sector include Citi Trends Inc. CTRN and Christopher & Banks Corp. CBK, both carrying a Zacks Rank #1.
CITI TRENDS INC CTRN: Free Stock Analysis Report
PROTO LABS INC PRLB: Free Stock Analysis Report
CHRISTOPHER&BNK CBK: Free Stock Analysis Report
MYERS INDS MYE: Free Stock Analysis Report
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