DUBLIN - Allegion plc (NYSE:ALLE), a prominent player in the global security products sector, has announced the acquisition of Krieger Specialty Products LLC, a manufacturer known for its high-performance doors and windows. The financial terms of the deal, completed through an Allegion subsidiary, remain undisclosed.
Krieger, based near Los Angeles, California, caters to industrial, commercial, and institutional clients with its specialized offerings, including security, acoustical, and thermal solutions. Its products are utilized in diverse facilities such as data centers, hospitals, and government buildings.
This strategic move allows Krieger to become a part of Allegion's Americas segment. Allegion Senior Vice President Dave Ilardi highlighted the acquisition's potential to enhance their portfolio and manufacturing capabilities in the region. He emphasized the synergy between the companies, noting the opportunity for growth through combined expertise and the service of customers with an expanded suite of products.
Krieger's CEO, Bob McCluney, will continue in an advisory role to facilitate a smooth integration, while Krieger's management team and employees will join Allegion Americas' non-residential division. This transition aligns with Allegion's existing brands such as Steelcraft and Republic Doors.
Both Allegion and Krieger share a commitment to technical innovation and customer satisfaction. The acquisition is expected to leverage the strengths of both entities to better serve their markets.
Allegion, with a revenue of $3.7 billion in 2023, has a broad portfolio of brands including CISA®, Interflex®, LCN®, Schlage®, SimonsVoss®, and Von Duprin®. The company specializes in security solutions around the door and adjacent areas, catering to a wide range of customers from homes to institutions.
This report is based on a press release statement from Allegion plc.
In other recent news, Allegion, the provider of security products and solutions, has reported a solid start to 2024 despite a 3.2% decrease in first-quarter revenue, which came in at $893.9 million. The company has made strategic moves with the acquisitions of Boss Door Controls and Dorcas, while also introducing a new smart lock integration with Airbnb.
In the face of a revenue dip, Allegion has returned approximately $42 million to shareholders through dividends and share repurchases and reaffirmed its 2024 outlook.
However, Barclays has downgraded Allegion's rating from Equalweight to Underweight, reducing the price target to $116 from $122. This adjustment is due to potential challenges in the US commercial construction sector and concerns about Allegion's exposure to this market. Barclays also anticipates that the benefits Allegion has gained from pricing and cost strategies could diminish in the near term.
These developments indicate a mixed outlook for Allegion, with strong institutional market performance and strategic acquisitions on one hand, and potential headwinds from the commercial construction sector on the other.
InvestingPro Insights
As Allegion plc (NYSE:ALLE) makes strategic moves to expand its portfolio through the acquisition of Krieger Specialty Products, the financial health and market performance of the company remain a key interest for investors. Allegion's commitment to growth and innovation is reflected in its financial metrics and market behavior, as captured by real-time data from InvestingPro.
ALLE's market capitalization stands at a robust $10.54 billion, highlighting its significant presence in the security products sector. The company's P/E ratio, currently at 19.47, suggests that investors are willing to pay a premium for its earnings, which may be due to the consistent profitability and growth prospects Allegion has demonstrated. Moreover, ALLE's revenue growth over the last twelve months is reported at 4.33%, indicating a steady increase in its business operations.
InvestingPro Tips also shed light on Allegion's financial practices and investor rewards. The company has raised its dividend for 10 consecutive years, showcasing a reliable commitment to returning value to shareholders. Additionally, ALLE has maintained dividend payments for 11 consecutive years, reinforcing the stability of its shareholder returns.
For investors seeking a deeper analysis, InvestingPro offers additional tips on Allegion's financial performance and market position. With a total of 7 InvestingPro Tips available, including insights into the company's debt levels, profitability, and stock volatility, investors can make more informed decisions. To access these tips and enhance your investment strategy, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
With a forward-looking approach to acquisitions and a solid financial standing, Allegion continues to be an interesting prospect for those invested in the security products market. The integration of Krieger is poised to contribute to ALLE's value creation and growth trajectory, as the company leverages its expanded capabilities to serve a diverse clientele.
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