This is an introduction to my Altra Industrial Motion stock analysis which is based on FY2017 results and the proposed terms and conditions of the pending amalgamation with 4 operating companies within Fortive Corporation’s Automation and Specialty Components business.
Altra Industrial Motion Corp. (NASDQ: AIMC) is a leading global designer, producer and marketer of a wide range of mechanical power transmission components. Its products are used to control and transmit power and torque in virtually any industrial application involving movement. Its products are sold in over 70 countries to customers in multiple industries such as energy, general industrial, material handling, metals, mining, special machinery, transportation, and turf and garden. The product portfolio includes clutches and brakes, couplings and gearing and other power transmission components.
What prompted me to write this article is that I was initially looking to analyze Danaher Corporation (NYSE: DHR). As I started my review I changed my mind and decided to first analyze Fortive Corporation (NYSE: FTV) which was a portion of DHR’s business which was spun-off in July 2016.
In reviewing FTV’s recent results and Press Releases, I noticed FTV had announced at the same time as AIMC in early March 2018, the intent to amalgamate 4 operating companies within FTV’s Automation and Specialty Components business with AIMC. The 4 operating companies are the market-leading brands of , , , and which generated ~$907 million in revenue for FTV’s fiscal year ended December 2017.
AIMC and FTV are awaiting shareholder and regulatory approval on this proposed transaction and same is expected in 2018. If the appropriate approvals are granted, AIMC would go from a business which generated revenue of ~$877 million in FY2017 (FY2018 sales projections of $895 - $915 million) to a company with combined revenue of ~$1.8B in FY2017. The essential doubling of AIMC would then take a business from a current ~$1.33B market cap to a business that would likely have a market cap in excess of ~$2.6B.
While a company this size is small relative to the companies in which I invest, I know there are readers who are interested in investing in smaller market cap companies. As a result, I am entirely open to periodically analyzing companies below my market cap threshold.
Please click here to read my Altra Industrial Motion stock analysis which is based on FY2017 results and the proposed terms and conditions of the pending amalgamation with 4 operating companies within Fortive Corporation's Automation and Specialty Components business which were announced March 7, 2018.
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