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Donaldson (DCI) Acquires Purilogics, Boosts Product Menu

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Donaldson Company, Inc. DCI recently announced the acquisition of Purilogics, LLC for an initial payment of about $20 million and a milestone-based earnout payment over the coming five years.

Shares of DCI were down 1.74% yesterday to eventually close the trading session at $48.

Based in Greenville, SC, Purilogics is a biotechnology firm. It provides an extensive portfolio of purification tools for several biologics, such as plasmid DNA, monoclonal antibodies, mRNA and others. Purilogics’ exclusive formulation and processes helps to create membranes for rapid production of cost-efficient biologic drugs.

Acquisition Rationale

With this buyout, Donaldson is expected to strengthen its life sciences portfolio by leveraging Purilogics’ unique product offerings. Donaldson’s proficiency in membrane technology and its global presence coupled with Purilogics’ expertise in membrane chromatography products will help it develop and market the biologics purification tools.

Purilogics will be integrated into DCI’s Industrial Filtration Solutions business in the Industrial Products segment. This segment manufactures and sells dust, mist and fume collectors, compressed air purification systems, air filtration systems (for gas turbines) and polytetrafluoroethylene (PTFE) membrane-based products, among others. The segment generated 29.6% of total revenues in third-quarter fiscal 2022 (ended April 2022).

Zacks Rank, Price Performance and Earnings Estimate Trend

Donaldson, with a $5.9-billion market capitalization, currently carries a Zacks Rank #3 (Hold). DCI is well-positioned to benefit from its solid product offerings, a diversified business structure and healthy demand in the quarters ahead. However, softness in its On-Road business is concerning.

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Shares of DCI have lost 17.1% compared with the 21.8% decline of its industry in the past six months.

The Zacks Consensus Estimate for fiscal 2022 (ending July 2022) earnings has been flat at $2.70 in the past 60 days. Earnings estimates for fiscal 2023 (ending July 2023) have moved 1.3% north to $3.07 during the same period.

Zacks Rank & Stocks to Consider

Some better-ranked companies from the industrial products sector are discussed below:

Applied Industrial Technologies, Inc. AIT presently sports a Zacks Rank #1. AIT delivered a trailing four-quarter earnings surprise of 25.4%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

AIT’s earnings estimates have increased 5.9% for fiscal 2022 (ending June 2022) in the past 60 days. The stock has dipped 2.8% in the past six months.

RBC Bearings Incorporated ROLL presently has a Zacks Rank #2 (Buy). ROLL delivered a trailing four-quarter earnings surprise of 3.4%, on average.

ROLL’s earnings estimates have increased 9.8% for fiscal 2023 (ending March 2022) in the past 60 days. Its shares have declined 7.7% in the past six months.

Roper Technologies, Inc. ROP presently has a Zacks Rank of 2. Its earnings surprise in the last four quarters was 2%, on average.

In the past 60 days, ROP’s earnings estimates have increased 1.2% for 2022. The stock has declined 21.7% in the past six months.


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