Standex acquires Custom Biogenic Systems for $6.2 million

SALEM, N.H. - Standex International Corporation (NYSE:SXI) has expanded its operations within the scientific refrigeration market with the acquisition of Custom Biogenic Systems (CBS), a Michigan-based manufacturer of cryogenic equipment. The $6.2 million cash transaction, financed through Standex's existing cash balance, is expected to immediately contribute to the company's earnings.

CBS, which has been in operation since 1987, is recognized for its specialized design and manufacturing of advanced cryogenic laboratory products, including Isothermal freezers that employ dry liquid nitrogen technology. These products serve the pharmaceutical and biobank sectors within life sciences. CBS's revenue for the calendar year 2024 is projected to be around $15 million.

David Dunbar, President and CEO of Standex, expressed enthusiasm for the acquisition, stating that CBS's offerings align with Standex's customer-focused strategy and enhance the company's North American manufacturing capabilities. According to Dunbar, CBS's integration into Standex's Scientific business segment will extend the company's market reach and is expected to bolster long-term growth potential.

Standex, a global manufacturer operating across various industries including Electronics, Engraving, Scientific, Engineering Technologies, and Specialty Solutions, has a presence in multiple countries. The acquisition of CBS—a company with over three decades of experience in the cryogenic storage industry—marks Standex's strategic move to strengthen its portfolio in the scientific equipment market.

The information for this article is based on a press release statement from Standex International Corporation.

In other recent news, Standex International Corporation reported a 7.7% decline in sales for the fiscal first quarter of 2025, despite maintaining a record gross margin above 40% and an operating margin near 16%. The company also announced the acquisition of Amran Instrument Transformers and Narayan Powertech, a strategic move anticipated to enhance various financial metrics and expand Standex's reach into fast-growth markets. The total revenue for the fiscal first quarter stood at $170.5 million, with an organic decline of 11.4%. The company reported a flat adjusted operating margin of 15.9% and a slight decrease in adjusted earnings per share to $1.71.

The acquisition, costing $462 million, is expected to boost revenue, EBITDA margin, operating margin, earnings per share, and free cash flow. Standex anticipates improved revenue in the second quarter, owing to the acquisition and stabilizing market demand. The company is also planning to launch new products across all business lines in fiscal year 2025, targeting a net leverage ratio below 1 within 24 months post-acquisition.

Standex expects the Amran/Narayan Group to generate approximately $100 million in revenue in 2024, with an adjusted EBITDA margin exceeding 40%. The Electronics segment, now the largest for Standex, is projected to see mid to high single-digit organic growth in the third and fourth quarters. The company is focusing on debt repayment and expects to improve operating margins and gross margins, aiming for the mid-20% range in the near future.

InvestingPro Insights

Standex International Corporation's (NYSE:SXI) recent acquisition of Custom Biogenic Systems aligns well with the company's strong financial position and growth trajectory. According to InvestingPro data, Standex boasts a market capitalization of $2.45 billion, reflecting its substantial presence in the industrial sector.

The company's financial health is underscored by several key metrics. Standex has maintained dividend payments for an impressive 54 consecutive years, demonstrating a commitment to shareholder returns. This is further supported by an InvestingPro Tip indicating that the company has raised its dividend for 14 consecutive years. With a current dividend yield of 0.63%, Standex offers a steady income stream to investors.

Standex's acquisition strategy is backed by a solid balance sheet. An InvestingPro Tip reveals that the company's liquid assets exceed short-term obligations, suggesting ample financial flexibility to pursue growth opportunities like the CBS acquisition. Moreover, Standex operates with a moderate level of debt, which provides room for strategic investments without overextending its financial resources.

The market has responded positively to Standex's performance and strategic moves. InvestingPro data shows a strong return of 45.89% over the past year, with the stock price currently at 95.43% of its 52-week high. This upward momentum is further evidenced by robust returns of 21.74% and 16.09% over the last three months and one month, respectively.

While Standex trades at a relatively high P/E ratio of 32.97, the company's consistent profitability and growth prospects may justify this valuation. An InvestingPro Tip notes that analysts predict the company will remain profitable this year, which bodes well for the integration of CBS and potential synergies.

For investors seeking a deeper understanding of Standex's potential, InvestingPro offers 11 additional tips, providing a comprehensive analysis of the company's financial health and market position.

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