Ametek Inks Deal To Acquire Abaco Systems For $1.35B

Ametek, a global manufacturer of electronic instruments and electromechanical devices, has agreed to snap up Abaco Systems, a provider of mission critical embedded computing systems, from Veritas Capital in an all-cash deal worth $1.35 billion.

The deal, which awaits regulatory approvals, is anticipated to close around mid-2021. Upon closure of the deal, Alabama-based Abaco Systems, with annual sales of $325 million, will join Ametek’s (AME) electronic instruments group (EIG).

Ametek CEO David A. Zapico said, “We are excited for the opportunity to acquire Abaco Systems. Their market leading embedded computing solutions are ideally positioned across a number of attractive aerospace and defense platforms, further broadening our differentiated product offering serving these markets.” (See Ametek stock analysis on TipRanks)

On Feb. 5, Rosenblatt Securities analyst Scott Graham reiterated a Buy rating and the price target of $140 (16% upside potential) on the stock as “all 3 legs of how AME grows earnings are coming together…improving sales, best-in-class productivity and acquisitions.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 5 Buys versus 2 Holds. The average analyst price target of $135.67 implies 12.4% upside potential to current levels. Shares have increased 24% over the past six months.

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