On Tuesday, Oppenheimer maintained its Perform rating for Nordson (NASDAQ:NDSN) Corporation (NASDAQ:NDSN), a producer of precision technology solutions. The confirmation of the rating follows Nordson's announcement of its intention to acquire Atrion Corporation, a leader in medical infusion and cardiovascular technology, for approximately $800 million, which translates to $460 per share. This valuation is based on a multiple of 20.5 times Atrion's projected 2023 EBITDA, or 15 times when factoring in anticipated synergies.
Nordson expects the acquisition to be completed within its 2024 fiscal year, ending in October. Atrion has reported sales of $169 million for 2023, a decrease of 8%, attributed to OEM inventory adjustments. Despite this, the company has maintained a solid EBITDA margin of 23%, although this is a decrease from 29% in the previous year. The margin decline was influenced by a range of factors including supply chain issues and increased long-term growth investments.
Atrion anticipates a high single-digit growth in 2024 and aims to improve its margin recovery. Nordson foresees a clear path to restoring Atrion's margins to the low 30% range and possibly even higher over time. The integration is expected to yield approximately $14 million in synergies within 24 months post-acquisition, with savings coming from a reduction in public company costs and improvements in supply chain and production efficiencies.
Looking ahead, Nordson projects that the acquisition could add $0.30 to $0.35 to its adjusted earnings per share for the fiscal year 2025, assuming a gradual reduction in debt from the initial quarter of the acquisition. This estimate includes the realization of about half of the projected synergies within the pro forma for FY25. The acquisition is seen as a strategic move to enhance Nordson's position in the medical technology sector.
InvestingPro Insights
As Nordson Corporation (NASDAQ:NDSN) navigates its latest acquisition, investors and analysts are closely watching the company's financial health and market performance. According to real-time data from InvestingPro, Nordson boasts a market capitalization of $13.47 billion and maintains impressive gross profit margins of 55.01%, indicating a strong ability to generate revenue over its costs. Furthermore, the company's operating income margin stands at a robust 26.1%, underscoring efficient management and profitability in its operations.
InvestingPro Tips highlight Nordson's commendable track record of raising its dividend for 31 consecutive years, reflecting a consistent return to shareholders and financial stability. In addition, Nordson's liquid assets surpass its short-term obligations, suggesting a solid liquidity position which is particularly reassuring as the company proceeds with its strategic acquisition of Atrion Corporation. For investors seeking more detailed analysis, there are additional InvestingPro Tips available, promising deeper insights into Nordson's financial dynamics.
For those interested in further investment strategies and metrics for Nordson, consider exploring the additional tips on InvestingPro. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering a more comprehensive investment toolkit.
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