LYNCHBURG, Va. - BWX Technologies, Inc. (NYSE:BWXT), a U.S.-based nuclear technology company with a market capitalization of $10.5 billion and impressive 54% return over the past year, announced its acquisition of Kinectrics, Inc., a Canadian firm specializing in lifecycle management services for the nuclear industry. The deal, valued at approximately $525 million, includes Kinectrics' net pension and debt liabilities along with transaction expenses. According to InvestingPro analysis, BWXT is currently trading above its Fair Value, reflecting strong investor confidence in its growth strategy.
The transaction is expected to significantly enhance BWXT's Commercial Operations segment by offering a more comprehensive suite of services to both existing and new customers in the nuclear power and nuclear medicine markets. Kinectrics, which is anticipated to generate $300 million in revenue for 2024, operates in two primary business areas: commercial power services and nuclear medicine. BWXT's strong financial health, rated as "GOOD" by InvestingPro, with revenue growth of 12% in the last twelve months, positions it well for this strategic expansion. InvestingPro subscribers have access to 13 additional key insights about BWXT's financial performance and growth potential.
Commercial power services include support throughout the nuclear power plant lifecycle, while the nuclear medicine division focuses on isotope production for the radiopharmaceutical industry. Kinectrics has been a key player in the Lutetium-177 supply chain since 2022, a critical component for oncology treatments.
John MacQuarrie, President of BWXT Commercial Operations, highlighted the strategic value of the acquisition, stating that it unites two industry leaders with complementary expertise. The integration of Kinectrics' over 1,300 engineers and technical experts is expected to nearly double BWXT's workforce in this segment, enhancing capabilities in lifecycle management, specialized plant services, and engineering.
The acquisition is set to close in mid-2025 and is projected to be modestly accretive to BWXT's earnings, excluding purchase accounting and one-time costs. Upon completion, Kinectrics will operate as a subsidiary of BWXT, with its financial results included within the Commercial Operations segment.
David Harris, President & CEO of Kinectrics, will continue to lead the organization post-acquisition, reporting to MacQuarrie.
This move comes on the heels of BWXT's earlier announcement of a $60 million expansion at its Cambridge, Ontario facility, aimed at increasing the plant's capacity and creating job opportunities. The company has maintained dividend payments for 13 consecutive years and operates with a moderate level of debt, demonstrating its financial stability. For a comprehensive analysis of BWXT's growth prospects and financial metrics, investors can access the detailed Pro Research Report available on InvestingPro, which provides expert insights on this and 1,400+ other top stocks.
BWXT will host a conference call today at 8:30 a.m. E.T. to discuss the acquisition details. Interested parties can access the call and accompanying presentation through BWXT's website.
The information in this article is based on a press release statement from BWXT.
In other recent news, BWX Technologies, Inc. secured a $3 billion contract from the U.S. Department of Energy for cleanup efforts at the West Valley Demonstration Project in New York. In addition, the company reported a 14% increase in organic revenue growth in the third quarter and an increase in adjusted earnings per share (EPS), leading to an upgraded 2024 adjusted EPS guidance of approximately $3.20. Despite Hurricane Helene's impact, BWXT maintained a robust free cash flow outlook of $225 million to $250 million for 2024.
The company also announced the acquisition of A.O.T. for $100 million. Government Operations reported a 17% revenue increase, while Commercial Operations experienced modest growth, particularly in the medical and nuclear sectors.
These recent developments indicate BWXT's confidence in its operational strategy and market position. However, it's worth noting that the company's free cash flow was a net use of $8 million in Q3 due to contract timing affected by Hurricane Helene. Despite this, expectations of continued success in the nuclear industry persist, as outlined by various analyst notes.
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