ROCHESTER, N.Y. - Transcat , Inc. (NASDAQ:TRNS), known for its accredited calibration services and distribution of professional-grade instrumentation, announced today the acquisition of Becnel Rental Tools LLC, a provider of rental tools and services for oil well decommissioning and maintenance. The deal, valued at $50 million, was paid with $32.5 million in company stock and $17.5 million in cash, subject to customary holdback provisions.
Becnel Rental Tools, founded in 2012, specializes in equipment rental for the oil and gas industry, particularly in highly regulated markets. ISO 9001:2015 certified, Becnel has been recognized for its ability to scale operations to meet the growing demand for well decommissioning services. The company's management, including President Jason Becnel, will continue to lead the team under Transcat's ownership.
Lee Rudow, President and CEO of Transcat, praised Becnel's expertise and stable customer relationships, anticipating that the acquisition will open up significant opportunities for cross-selling Transcat's services.
He emphasized the strategic fit of Becnel within Transcat's portfolio, noting the attractive financial performance and the potential for expansion in gross and EBITDA margins for Transcat's Service and Distribution segments. The acquired business is expected to contribute approximately $5.8 million in EBITDA.
Transcat operates across highly regulated industries, offering a range of services from calibration to compliance and validation. The company operates 27 Calibration Service Centers and maintains calibration labs in 21 embedded customer-site locations. Its distribution segment sells and rents instrumentation, leveraging its service capabilities to provide a comprehensive value proposition to its customers.
This transaction is based on a press release statement and is intended to provide factual information without endorsement of claims.
InvestingPro Insights
Following the announcement of Transcat's (NASDAQ:TRNS) latest acquisition, investors are keen on understanding the financial health and market position of the company. Transcat boasts a strong balance sheet, as indicated by one of the InvestingPro Tips, highlighting that the company holds more cash than debt, which suggests financial stability and the ability to fund future growth. Additionally, the same InvestingPro Tips reveal that Transcat's liquid assets exceed its short-term obligations, further underscoring the company's liquidity and short-term financial security.
However, investors should note that Transcat is trading at a high earnings multiple, with a P/E Ratio of 84.12, which may suggest that the stock is priced optimistically relative to its earnings. The company's Price/Book ratio also stands at 4.46, which could imply a premium valuation compared to the book value of its assets. Despite the premium valuation, analysts predict the company will be profitable this year, which could justify the higher multiples to some extent.
From a performance standpoint, Transcat has experienced a solid revenue growth of 11.7% over the last twelve months as of Q3 2024, indicating a healthy expansion in its business operations. This growth trajectory is consistent with the company's strategic acquisitions and capability investments aimed at driving organic sales growth.
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