Wabash National Corp. (WNC), the semi-trailer maker, recently acquired Walker Group Holdings for $360 million in cash. The deal not only helps WNC's bottom line, but enhances its business by adding the expertise in liquid-transportation systems Walker was best known for. WNC announces earnings on April 29th, and if the Walker acquisition has an immediate effect, earnings estimates of $0.09/share should be easily surpassed.
How does the acquisition benefit Wabash? Walker Group Holdings brings a very strong portfolio of its four existing brands to WNC. These brands not only consist of elements within themselves but as a conglomerate they will contribute to WNC's growth. By examining each of Walker's brands, we're able to demonstrate their effects.
Walker Stainless Equipment - Walker Stainless Equipment specializes in the design and manufacturing of stainless steel equipment solutions such as tanker and trailer equipment within the dairy, pharmaceutical and ethanol industries. Since 1943, Walker has been fabricating and implementing these designs on various models of transportation equipment.
Progress Tank (GasRite) - One of the leading companies in the aviation refueling sector, Progress Tank manufactures and fabricates solutions for aviation vehicles. Progress also adds its global presence and portfolio of aluminum and vacuum tanker solutions.
Brenner Tank - When it comes to transporting food, chemical and environmental products Brenner is the leading choice. The acquisition will allow Wabash to gain a stronger foothold when specifically transporting those types of goods. "Brenner Tank is a market leader, offering the very best tank trailer design and fabrication. Through growth and change, Brenner has remained strong by retaining the core values that built the family-owned business over 100 years ago. Brenner customers can always expect high quality tanks and friendly, responsive service. Old fashioned service is still a way of life at Brenner." (I)
Bulk Tank International - Considered by many to be one of the most competitive trucking and logistics companies in North America, Bulk Tank strengthens Wabash's presence not only in the US, but in Canada and Mexico as well.
Wabash certainly got the most for its money, when they spent $360 million to acquire Walker Holdings. Investors should continue to stay long on the company and there's no reason why the continued growth can't exceed EPS of $0.09/share and a price target of $13/share.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.