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Curtiss-Wright: Long-Term Value Creator Continues To Pursue Bolt-On Deals

Mar. 01, 2020 6:59 AM ETCurtiss-Wright Corporation (CW)


  • Curtiss-Wright continues to make bolt-on acquisitions, in line with its long-term winning strategy.
  • The company has been selling off along with the market as well and now trades at a market multiple (although that might be down a bit as well).
  • The long-term wining strategy and resilient balance sheet makes Curtiss-Wright look relatively attractive, although one has to recognize that the entire market has sold off.
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Curtiss-Wright (NYSE:CW) announced a bolt-on acquisition the day after releasing its full-year results for 2019, warranting an update on this long-term value creator which like the rest of the market has been hit by the impact of the Coronavirus.

The valuation looks compelling as the company has done a great job at integrating bolt-on deals, extracting real value from them, while preserving balance sheet integrity, thereby it does not put investors at risk. While shares are off quite a bit like the remainder of the market, this looks like a compelling entry level, yet the same applies for the rest of the market, and risks might of course become apparent to the full-year guidance.

A Look At The Latest Bolt-On

Curtiss-Wright has announced the bolt-on acquisition of Dyna-Flo Control Valve Services in a $62 million deal. The company designs and manufactures linear and rotary control valves, isolation valves, and pressure control systems. Typically, these products are found in the chemical, petrochemical and oil & gas markets, as one can have some doubts about the real growth potential for these end markets over time.

The company has been in business for over a quarter of a century, currently employs about 120 workers and is set to generate $25 million in sales, indicating that a 2.5 time sales multiple has been paid. No margin details have been announced other than that the deal will be accretive to adjusted earnings per share. Needless to say, this is truly a bolt-on deal as the expected sales contribution adds up to exactly 1% of the revenues reported by the firm in 2019.

Note that this is the second bolt-on deal in recent times. In December, CW acquired 901D Holdings LLC in a $132 million cash deal, adding about $50 million in annual sales.

The Business, The

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The Value Investor has a Master of Science with specialization in financial markets and a decade of experience tracking companies via catalytic company events.

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