CINCINNATI - Hillman Solutions Corp. (NASDAQ:HLMN), a prominent provider of hardware products and merchandising solutions, has announced the acquisition of Intex DIY, Inc., a leading supplier of wiping cloths and cleaning textiles. This strategic move is aimed at expanding Hillman's Protective Solutions (PS) business, which currently includes popular brands such as Firm Grip, Gorilla Grip, Grease Monkey, AWP, and Digz.
Intex DIY, established in 2005, is recognized for its patented and innovative products in the cleaning rag category, serving a variety of markets from home improvement to auto and marine care. With an expected annual revenue of around $55 million for 2024, Intex is set to complement Hillman's current offerings in the cleaning products sector. Doug Cahill, Hillman's chairman, president, and CEO, expressed enthusiasm for the acquisition, noting the company's intention to leverage its existing network to distribute Intex's product line to both new and existing customers.
The acquisition not only enhances Hillman's product range but also aligns with its long-term growth strategy that includes adjacent aisle, bolt-on acquisitions. Intex boasts a high customer retention rate, providing a 98 percent fill rate to its top ten customers for nearly 15 years. Hillman, celebrating its 60th anniversary this year, continues to focus on delivering quality hardware solutions across North America.
Earlier this year, Hillman also acquired Koch Industries, a provider of rope and twine, chain, wire rope, and related hardware products, marking its second acquisition in 2024. The financial terms of the Intex acquisition, which was conducted through Hillman's wholly-owned subsidiary Big Time Products, LLC, were not disclosed.
This acquisition strengthens Hillman's position in the market and broadens its reach within the cleaning products category. The company's recent partnership with Kontoor Brands (NYSE:KTB) to launch Wrangler-branded work gloves in 2025 further demonstrates its commitment to growth and innovation in the hardware and home improvement sector.
The information for this report is based on a press release statement from Hillman Solutions Corp.
In other recent news, Hillman Solutions Corp. reported a strong second quarter of 2024, with an 18% increase in adjusted EBITDA, surpassing expectations. Despite a challenging market, the company raised its full-year adjusted EBITDA guidance, while net sales expectations were revised due to a soft market. The company continues to focus on its low-risk acquisition strategy and plans to leverage its in-store services and brands for growth, with optimism for its Retail Display Systems (RDS).
Hillman Solutions Corp. also announced a succession plan, with a new CEO set to take over in January 2025. The company expects to maintain adjusted gross margins above 47% for the rest of the year and anticipates a net leverage ratio of approximately 2.7 times by the end of 2024. Despite market headwinds, Hillman's long-term growth algorithm remains intact, with expectations of high single to low double-digit organic top line growth and low to mid-teens adjusted EBITDA growth in a healthy macro environment.
The company's RDS business is expected to grow, with plans to have 1,200 machines by year-end. Despite a decrease in net sales in the second quarter compared to the previous year, free cash flow improved significantly in the first half of the year. These are some of the recent developments in Hillman Solutions Corp. that may be of interest to investors.
InvestingPro Insights
As Hillman Solutions Corp. (NASDAQ:HLMN) continues to expand its footprint in the hardware and home improvement sector through strategic acquisitions, it's worth noting some key financial metrics and analyst insights that shed light on the company's performance and future prospects. According to InvestingPro data, Hillman currently holds a market capitalization of $1.9 billion, demonstrating its substantial presence in the industry.
InvestingPro Tips highlight that analysts are optimistic about Hillman's financial health, with seven analysts having revised their earnings upwards for the upcoming period, indicating a positive outlook on the company's profitability. Moreover, Hillman is expected to be profitable this year, which is reinforced by its liquid assets exceeding short-term obligations, providing the company with a solid financial cushion to support its growth initiatives.
The data also reveals a high Price/Earnings (P/E) ratio of 311.61, suggesting that the stock is trading at a premium based on current earnings. This could be attributed to the market's confidence in Hillman's growth trajectory and its recent strategic moves, such as the acquisition of Intex DIY, Inc. However, investors should be mindful of the company's valuation and consider the adjusted P/E ratio for the last twelve months as of Q2 2024, which stands at a lower yet still significant 110.6.
For those interested in a deeper dive into Hillman's financials and strategic positioning, InvestingPro offers additional insights. There are currently more tips available on the platform, providing a comprehensive analysis for investors and industry observers alike. To explore further, visit https://www.investing.com/pro/HLMN.
Lastly, with Hillman's next earnings date approaching on October 31, 2024, stakeholders will be keenly awaiting the company's performance update, which will provide further clarity on the impact of recent acquisitions and its growth strategy moving forward.
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