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Middleby expands with JC Ford acquisition

Published 11/01/2024, 09:04 AM
MIDD
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ELGIN, Ill. - The Middleby (NASDAQ:MIDD) Corporation (NASDAQ: MIDD), a global leader in the foodservice industry, has acquired JC Ford (NYSE:F), a prominent manufacturer of tortilla production equipment. JC Ford, based in Columbia, Tenn., boasts annual revenues of $70 million and is recognized for its comprehensive automated solutions for corn and flour tortillas, tortilla chips, and other corn-based snacks.

This strategic move comes as consumer demand for tortilla products continues to rise, marking it as one of the fastest-growing segments in the baked food market both domestically and internationally. JC Ford's advancement includes a modern 132,000-square-foot production facility in the Nashville area, operational since 2021.

Middleby CEO, Tim FitzGerald, highlighted the significance of the acquisition, noting that JC Ford's innovative solutions have set industry standards and allowed customers to automate production lines efficiently. He emphasized the company's strong customer base and recurring revenue, which are anticipated to contribute to Middleby's growth and margin opportunities through synergies.

The Middleby Corporation is renowned for its comprehensive solutions used in commercial foodservice, food processing, and residential kitchens. Its commitment to innovation is showcased through its Middleby Innovation Kitchens and its recognition as a World’s Best Employer by Forbes in 2022.

The acquisition of JC Ford is expected to enhance Middleby's presence in the growing snack food category, complementing its current product offerings and reinforcing its market position. This move aligns with Middleby's strategy to target attractive, expanding markets within the food processing group.

The transaction details were not disclosed in the press release statement. Middleby's portfolio includes advanced solutions for commercial foodservice, industrial baking, and food processing, as well as residential kitchen appliances, further solidified by this latest acquisition.

In other recent news, Middleby Corporation has made significant strides despite facing challenges. The company reported its second-quarter earnings for 2024, revealing a 7% increase in revenue from the first quarter, reaching $992 million. Despite a decline in revenue from the previous year, the company saw strong profitability with margin expansion in its commercial foodservice and food processing businesses. Middleby also announced the acquisition of Emery Thompson, a leading brand in the frozen dessert equipment sector, aiming to enhance its product offerings. This strategic acquisition is expected to position Middleby favorably in the frozen dessert market.

In the realm of analyst notes, Baird has adjusted its outlook on Middleby, reducing the price target for Middleby shares but retaining an Outperform rating. Similarly, KeyBanc Capital Markets has maintained its Overweight rating on Middleby shares, citing potential growth in the restaurant industry. These recent developments highlight Middleby's ongoing efforts to navigate a challenging market while focusing on new product innovations and operational efficiency.

InvestingPro Insights

The Middleby Corporation's acquisition of JC Ford aligns well with its current financial position and market performance. According to InvestingPro data, Middleby boasts a market capitalization of $6.97 billion, reflecting its significant presence in the foodservice industry. The company's price-to-earnings ratio of 19.64 suggests a reasonable valuation relative to its earnings, which could be further enhanced by the strategic acquisition of JC Ford.

An InvestingPro Tip indicates that Middleby operates with a moderate level of debt, which may have facilitated this acquisition without overly straining its financial position. Additionally, the company's liquid assets exceed short-term obligations, providing financial flexibility to integrate JC Ford and potentially pursue further growth opportunities.

Despite a recent revenue decline of 4.03% over the last twelve months, Middleby maintains a strong gross profit margin of 38.08% and an operating income margin of 18.04%. These healthy margins suggest that the company is well-positioned to absorb JC Ford's operations and potentially improve overall profitability through synergies, as mentioned by CEO Tim FitzGerald.

Investors should note that while Middleby's stock price movements are quite volatile, as highlighted by another InvestingPro Tip, the company's fundamentals remain solid. Analysts predict the company will be profitable this year, which could be further bolstered by the integration of JC Ford's $70 million annual revenue stream.

For those interested in a deeper analysis, InvestingPro offers additional tips and insights that could provide valuable context for Middleby's latest strategic move. There are 5 more InvestingPro Tips available for Middleby, offering a more comprehensive view of the company's financial health and market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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