Designer, manufacturer and marketer of in-ground residential swimming pools, Latham Group, Inc. (SWIM) recently announced that it has acquired a manufacturer of vinyl liner aluminum swimming pools, Radiant Pools, for $90 million.
Following the news, shares of the company jumped almost 10% to close at $25.77 in Tuesday’s extended trading session.
Latham Group has funded the deal through a combination of cash and incremental borrowing under its revolving credit facility.
The buyout will allow SWIM to get access to Radiant Pools’ patented technology, which has been derived from aerospace engineering, to make structurally insulated wall panels. This technology makes its products a durable and attractive buy for homeowners.
Management Commentary
The CEO of Latham Group, Scott Rajeski, said, “Radiant Pools is an excellent addition to Latham’s product portfolio since it complements our existing business and enables us to expand our addressable market. Radiant Pools primarily serves the Northeastern U.S., giving us the opportunity to roll its outstanding products across North America in partnership with Latham’s industry-leading dealer network.”
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Price Target
Recently, Morgan Stanley analyst Joshua Pokrzywinski reiterated a Hold rating on the stock. The analyst, however, raised the price target from $18 to $24, which implies downside potential of 6.9% from current levels.
The Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 4 Buys and 2 Holds. The average Latham Group price target of $24.50 implies that the stock has downside potential of 4.9% from current levels. Shares have declined 5.4% over the past year.
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