ST. LOUIS - Core & Main Inc. (NYSE: CNM), a distributor specializing in infrastructure products and services, has announced a definitive agreement to acquire the assets of ARGCO Northeast LLC, a New Jersey-based fire protection product distributor. The acquisition is aimed at strengthening Core & Main's presence in the fire protection industry and enhancing its service offerings.
ARGCO Northeast, located in Saddle Brook, New Jersey, is recognized for its wide range of fire protection products and customer service. Mike Huebert, president of Core & Main, expressed enthusiasm about the acquisition, noting that ARGCO Northeast's commitment to being a trusted partner aligns with Core & Main's values. He emphasized the potential for the ARGCO Northeast team to enhance Core & Main's capabilities in delivering quality fire protection products and services.
Richard Dehn, general manager of ARGCO Northeast, also commented on the acquisition, highlighting the alignment of values between the two companies and the anticipated benefits for customers. He anticipates that the additional resources provided by Core & Main will offer expanded product and service options as well as new opportunities for associate career development.
Core & Main, headquartered in St. Louis, operates over 350 locations across the United States and employs nearly 5,500 associates. The company focuses on supplying water, wastewater, storm drainage, and fire protection products and services, serving a variety of end markets including municipal, non-residential, and residential sectors.
The financial terms of the acquisition were not disclosed in the press release statement. The completion of the transaction is subject to customary closing conditions. Core & Main's forward-looking statements regarding the anticipated benefits of the acquisition are subject to risks and uncertainties, and actual results may differ materially from those projected.
This news is based on a press release statement from Core & Main Inc.
In other recent news, Core & Main has announced a definitive agreement to acquire the assets of Eastcom Associates Inc., marking a strategic expansion for the infrastructure distributor. This acquisition aims to enhance Core & Main's product offerings in the damage prevention space. In financial news, Core & Main reported a 6% increase in second-quarter net sales, reaching $1.96 billion. However, due to lower-than-expected end-market volumes, the company revised its full-year net sales and adjusted EBITDA projections downwards.
Several analyst firms, including Wells Fargo, Loop Capital, Truist Securities, RBC Capital, and Baird, have adjusted their outlook on Core & Main. While Wells Fargo initiated coverage with an Overweight rating, the other firms have lowered their price targets, maintaining a neutral to positive rating. Despite these adjustments, these firms anticipate potential positive developments for Core & Main in the longer term.
As part of its growth strategy, Core & Main announced a $500 million share repurchase program and completed several acquisitions, with two more announced post-quarter. These are among the recent developments for Core & Main.
InvestingPro Insights
Core & Main's acquisition of ARGCO Northeast aligns with the company's strategic growth initiatives, as reflected in recent InvestingPro data. With a market capitalization of $8.72 billion, Core & Main has demonstrated solid financial performance, boasting a revenue of $6.97 billion in the last twelve months as of Q2 2023, with a 5.21% revenue growth.
The company's profitability is evident, with a gross profit of $1.86 billion and an operating income of $710 million over the same period. This financial strength supports Core & Main's ability to pursue strategic acquisitions like ARGCO Northeast, potentially enhancing its market position in the fire protection sector.
InvestingPro Tips highlight that Core & Main has been aggressively buying back shares, which could indicate management's confidence in the company's future prospects. Additionally, the company's liquid assets exceed short-term obligations, suggesting a strong financial position to support its expansion strategy.
Despite a 25.36% price decline over the past six months, Core & Main's stock has shown resilience with a 39.99% return over the past year. This volatility may present opportunities for investors as the company continues to grow through acquisitions and expand its service offerings.
For readers interested in a deeper analysis, InvestingPro offers 8 additional tips that could provide further insights into Core & Main's investment potential.
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