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Middleby (MIDD) Buys United Foodservice, Expands China Offerings

The Middleby Corporation MIDD recently announced that it has completed the acquisition of United Foodservice Equipment Group. However, the financial terms of the transaction were not disclosed.

Notably, Middleby’s shares declined 0.5% yesterday to eventually close the trading session at $131.23.

Based in Zhuhai Guangdong China, United Foodservice is a leading designer, manufacturer and supplier of counter top commercial foodservice equipment. The company sells its products under the brand name, Thor.

Acquisition Rationale

The latest buyout is in sync with Middleby’s policy of acquiring businesses for its expanding market share and customer base. Notably, the inclusion of United Foodservice’s solid product line supported by its strong designing and manufacturing capabilities will enable Middleby to expand its offerings and provide a comprehensive foodservice equipment solution to customers in China.

Other Inorganic Moves

Another notable acquisition made by the company recently is the Wild Goose buyout (December 2020). The buyout is anticipated to create strong growth opportunities for Middleby in the canned beverages market. Also, the company’s Deutsche Beverage buyout (March 2020) is helping it strengthen its product offerings in the beverage platform. Further, its acquisition of RAM Fry Dispensers (January 2020) has been strengthening its product offerings in the restaurant automation platform.

Notably, acquired assets boosted Middleby’s sales by 2.3% and 1.1% in the second and third quarters of 2020, respectively.

Zacks Rank & Price Performance

The Zacks Rank #3 (Hold) company’s shares have gained 63.3% compared with 30.4% growth recorded by the industry in the past six months. The company stands to benefit from its strong product portfolio, acquired assets, a healthy liquidity position as well as growth opportunities across its operating segments. However, its high debt levels and headwinds arising from its international operations persist.

Stocks to Consider

Some better-ranked stocks from the same space are EnPro Industries, Inc. NPO, Graco Inc. GGG and Kaman Corporation KAMN. While EnPro currently sports a Zacks Rank #1 (Strong Buy), Graco and Kaman carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

EnPro delivered a positive earnings surprise of 279.71%, on average, in the trailing four quarters.

Graco delivered a positive earnings surprise of 21.74%, on average, in the trailing four quarters.

Kaman delivered a positive earnings surprise of 43.61%, on average, in the trailing four quarters.

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Graco Inc. (GGG): Free Stock Analysis Report
 
Kaman Corporation (KAMN): Free Stock Analysis Report
 
EnPro Industries (NPO): Free Stock Analysis Report
 
The Middleby Corporation (MIDD): Free Stock Analysis Report
 
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