IDEX Corporation (NYSE: IEX) has completed the acquisition of Randolph, NJ-based Nexsight, LLC for $120 million in cash. The agreement was inked in November last year. Shares of IDEX lost 1.7% to close at $188.72 on Tuesday.
Headquartered in Northbrook, IL, IDEX is one of the leading providers of applied solutions, including pumps, valves, sealing solutions, and material processing technologies. Its presence is extensive in industrial, fire & safety, food & pharma, energy, life sciences, and other end markets.
Why is Nexsight a Strategic Fit for IDEX?
Nexsight focuses on technical communication, technology road mapping, program management and execution, and strategic planning. It has a solid customer base in cybersecurity, manufacturing and advanced materials, food & agriculture, energy, infrastructure, health and medicine, and scientific research markets. Nexsight’s annual revenue is roughly $50 million.
As part of the buyout, IDEX has acquired Nexsight’s well-known businesses — Pipeline Renewal Technologies, Envirosight, MyTana, and WinCan. The acquisition will boost growth opportunities for IDEX’s existing wastewater-related businesses, ADS and iPEK. While ADS provides solutions related to wastewater collection systems, iPEK offers controlled systems for remotely monitoring infrastructure.
Interestingly, ADS and iPEK are part of the Water platform of IDEX’s Fluid & Metering Technologies (FMT) segment. In 2021, the segment’s revenues were $998.7 million, up 11.4% year-over-year, and represented 36% of the company’s total revenue. In 2022, the company anticipates FMT to benefit from improvements in chemical, energy, and industrial end markets.
Official Comments
IDEX’s President and CEO, Eric Ashleman, said, “Nexsight and its employees worldwide are a welcome addition to the IDEX family of businesses, expanding our expertise in the inspection and monitoring of wastewater infrastructure, where we help predict and identify wastewater system issues early, preventing them from causing property damage, harming the environment and impacting public health.”
Snapshot of IDEX’s Projections
For 2022, IDEX anticipates adjusted earnings to be within $7.33-$7.63 per share and revenue to vary from $2,934 million to $3,014 million. Organic sales are predicted to increase 5%-8% year-over-year, and buyouts to boost the top line by 2% (4% in the first quarter).
Stock Rating
Nathan Jones, an analyst at Stifel Nicolaus, reiterated a Buy recommendation on IDEX and the price target of $244, which suggests 29.29% upside potential from the current levels.
IDEX has a Moderate Buy consensus rating based on 6 Buys and 3 Holds. The average IDEX price target of $246.75 suggests 30.75% upside potential from the current levels. Over the past year, shares of IDEX have decreased 4.6%.
Hedge Fund Activity
According to the TipRanks Hedge Fund Trading tool, confidence is Very Positive for IDEX, based on the activities of all four hedge funds. Holdings in IDEX shares have increased by 87 thousand in the last quarter.
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