MSC Industrial Supply Co. MSM yesterday announced that it acquired majority interests in Wichita, KS-based Wm. F. Hurst Co., LLC. The financial terms of the transaction are not yet disclosed.
Notably, MSC Industrial’s shares gained 0.77% in Tuesday’s trading session, closing at $95.13.
Inside the Headlines
Wm. F. Hurst engages in distributing metalworking tools as well as supplies for customers in the aerospace industry. It has offices in Dallas, TX; Wichita, KS; and Kansas City, MO.
Per the buyout terms, Wm. F. Hurst will retain its original name and operate as a company of MSC Industrial. Also, John Mullen will hold a minority stake in the acquired entity and continue to lead its operations.
The acquisition is anticipated to strengthen MSC Industrial’s presence in the metalworking industry. Also, it will enhance the company’s technical capabilities and exposure in the aerospace domain.
MSC Industrial’s Buyout Activities
Acquiring businesses is an effective way for the company to gain access to new markets, expand its product line and grow its customer base. Notably, the company has invested $100.9 million in making acquisitions in the past three fiscal years (2018-2020).
Markedly, except for the Wm. F. Hurst buyout, MSC Industrial has refrained from indulging in other acquisition activities so far in fiscal 2021.
Zacks Rank, Estimate Trend and Price Performance
With a $5.3-billion market capitalization, MSC Industrial currently carries a Zacks Rank #3 (Hold). The company is poised to benefit from healthy demand for products, synergistic gains from its purchased assets and growth investments. Rise in the cost of sales might be concerning.
In the past three months, shares of the company have rallied 12.9% against the industry’s decline of 5.8%.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for earnings is pegged at $4.74 for fiscal 2021 (ending August 2021) and $5.20 for fiscal 2022 (ending August 2022), indicating growth of 0.6% and 0.4% each from the respective 30-day-ago figures. Also, the company’s earnings estimate for the third quarter of fiscal 2021 (ended May 2021, results yet to be released) is pegged at 41.38 per share, suggesting no change from the 30-day-ago figure.