Astec Acts on Its Growth Plans – Analyst Blog
Source: http://www.zacks.com/stock/news/25580/Astec+Acts+on+Its+Growth+Plans+-+Analyst+BlogPosted on Wednesday, October 7th, 2009 | In Investing Lessons, Stocks to Watch
Astec Industries, Inc. (ASTE) recently acquired Industrial Mechanical & Integration (IMI), a wood pellet machine manufacturing company based in Canada. The company did not disclose the financial terms of the acquisition.
IMI has a unique technology, which it has been testing for two years. It is now making the first group of production machines. President of IMI and key employees have agreed to remain with the company to further develop and promote this new technology.
Already with some of its business units making components required by the wood pellet industry, Astec has further strengthened its position as a turnkey supplier to this market. Astec said that with this acquisition it can provide a one-stop solution to those customers who want a pellet plant that can process material from round wood to the finished product.
The company pointed out that conventional pellet production machines do not always work well with a wide variety of wood species. The IMI acquisition dovetails with Astec’s efforts to grow the renewable fuel portion of its business. The company believes that wood pellets will be an important part of the renewable energy standards that are being adopted in the USA and around the world.
Moreover, this acquisition is in line with Astec’s plans of using the current slowdown in each of its businesses to aggressively move forward on new product developments and improvements. The company remains focused on acquisitions and plans to continue to diversify into markets that can apply its equipment and to markets that are counter-cyclic to the infrastructure business.
Astec intends to broaden its products as well as the markets it serves in order to keep its plants running at reasonable capacity.
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