Shares of industrial gas producer and supplier, Praxair Inc. (NYSE: PX) gained 0.42% on Apr 2, 2014 as the company made public the acquisition of Michigan-based independent packaged gas and welding products distributor, Lake Welding Supply Company, Inc. Financial terms of the transaction were undisclosed.
Lake Welding Supply Company was formed in 1953 and has its cylinder filling plant located at Muskegon, MI. Sales approximated $20 million in 2013. This acquisition will enable Praxair to expand its business through Lake Welding's retail stores in Holland, Ferrysburg and Manistee.
Expansion of the gas distribution capacity has been an area of focus for Praxair in the past few quarters. The company, in Mar 2014, acquired two packaged gas distributors, United Welding Supplies, LLC in Texas and Best Welders Supply, Inc. in Oklahoma. Addition of these two independent distributors has strengthened Praxair's presence in the greater Houston area and the Tulsa region. Also, roughly 74 skilled employees of United Welding Supplies and Best Welders are now working for Praxair.
In 2013, Praxair generated roughly 30% of the total revenue ($11.9 billion) from its packaged gas distribution businesses. In North America, acquired assets of packaged gas distributors accounted for roughly 1% of sales growth.
Strategic acquisitions, over time, have enabled Praxair to grow its businesses in unexplored markets or expand in existing markets. Acquisitions contributed 3% to total revenue growth in 2013, while roughly 1% top-line growth is expected from these in 2014.
Praxair currently has a market capitalization of $38.7 billion and carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Methanex Corporation (NASDAQ: MEOH), Dow Chemical Company (NYSE: DOW) and Cabot Corporation (NYSE: CBT). While Methanex holds a Zacks Rank #1 (Strong Buy), Dow Chemical and Cabot Corporation carry a Zacks Rank #2 (Buy).
CABOT CORP (NYSE: CBT): Free Stock Analysis Report
DOW CHEMICAL (NYSE: DOW): Free Stock Analysis Report
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PRAXAIR INC (NYSE: PX): Free Stock Analysis Report
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