Diversified leading manufacturer of highly engineered critical components and customized technology solutions, ITT (ITT) acquired Habonim, which designs and manufactures valves, valve automation, and actuation for gas distribution, biotech, and harsh application sectors, for $140 million.
Habonim’s differentiated business model enables it to commercialize a large part of its products via distribution while also maintaining relationships with end-users. The company also sells directly to original equipment manufacturers (OEMs) and integrators.
The all-cash transaction closed in the second quarter of 2022 and is estimated to be accretive to ITT’s consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) margin. Notably, the move bolsters ITT’s valves business to a ~$140 million platform.
Management Weighs In
Luca Savi, CEO and President of ITT, commented, “The acquisition provides ITT access to new, attractive niche markets, expands IP’s existing specialty valves portfolio, including through its cryogenic and hydrogen ball valves offerings for green energy applications, and builds on an already strong distribution network in North America.”
Ilan Gilboa, the CEO of Habonim, added, “Becoming part of ITT is a very important and exciting step for Habonim on our path to grow and expand our global leadership in the highly performing valves and automated-valves markets.”
Hedge Fund Activity
According to TipRanks data, Wall Street’s top hedge funds have increased holdings in ITT by 71,100 shares in the last quarter, indicating a very positive hedge fund confidence signal in the stock based on activities of 3 hedge funds.
Valuation Speaks
Let us consider some key metrics for ITT and how it fares against the broader industry. The company’s EBITDA margin of 19.9% outperforms the industry median of 13.3%, implying that the company has a better-optimized cost structure.
Further, a return on total assets of 8.9% implies that ITT is more efficient at putting its assets to work than the broader industry, where the median figure is 5.1%.
Finally, the company has a net income per employee of $31,950, which compared to the industry median of $20,500, indicates ITT is better at utilizing its human capital versus its peers.
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