Steel products manufacturer Nucor Corporation (NYSE: NUE) recently revealed that it has acquired a steel racking manufacturer, Elite Storage Solutions, for $75 million.
Following the news, shares of the company declined over 1% to close at $147.70 in Tuesday’s extended trading session.
With this buyout, Nucor has further strengthened its steel raking capabilities. Last year, it had acquired a pallet rack and steel tube manufacturer, Hannibal Industries.
The latest acquisition is expected to give the company access to new customers and logistical advantages for its existing customers.
The President of Sheet and Tubular Products at Nucor, Giff Daughtridge, said, “We are excited to grow our steel racking capabilities with this acquisition of Elite Storage Solutions. Establishing a manufacturing presence in the southeast complements our existing steel racking business and allows us to serve our racking customers nationwide more efficiently.”
Consensus among analysts is a Hold based on six Holds and one Sell. NUE’s average price forecast of $121.29 implies downside potential of 18.5% from current levels. Shares have gained 86.4% over the past year.
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