HUNTSVILLE, AL - Lakeland Industries , Inc. (NASDAQ:LAKE), a global manufacturer of protective clothing, announced its definitive agreement to purchase the fire and rescue segment of LHD Group Deutschland GmbH and its subsidiaries in Hong Kong and Australia. The all-cash deal is valued at approximately $16.7 million and is set to close in May, pending regulatory approvals.
LHD Group, based in Wesseling, Germany, is known for its firefighter turnout gear and Total Care services, which include maintenance, cleaning, and repair. The company generates annual revenue of around $27 million and has a workforce of 111 employees who will continue their roles post-acquisition.
Lakeland's Acting CEO, Jim Jenkins, stated that this acquisition propels the company's strategy to increase its market share in fire services. LHD's premium products and services, along with its established market presence in key regions, align well with Lakeland's portfolio. The Total Care services are expected to contribute a recurring revenue stream, which Lakeland plans to expand.
Lakeland Industries, with its range of industrial protective clothing brands, operates globally, serving a diverse clientele across various industries and government agencies. The addition of LHD's business is anticipated to be immediately accretive to Lakeland's earnings.
InvestingPro Insights
As Lakeland Industries, Inc. (NASDAQ:LAKE) moves forward with its strategic acquisition of the fire and rescue segment of LHD Group Deutschland GmbH, the financial health and market performance of Lakeland Industries offer additional insights. According to InvestingPro data, Lakeland Industries has a market capitalization of $131.02 million and a Price-to-Earnings (P/E) ratio of 19.85, which adjusts to 21.94 when looking at the last twelve months as of Q3 2024. The company's revenue growth for the same period stands at a robust 10.67%, indicating a positive trajectory in its financial performance.
An InvestingPro Tip highlights that Lakeland Industries holds more cash than debt on its balance sheet, which is a strong indicator of financial stability. This could be particularly relevant for investors considering the company's ability to finance the acquisition without jeopardizing its liquidity position. Additionally, analysts predict that the company will be profitable this year, aligning with the expectation that the acquisition will be immediately accretive to Lakeland's earnings.
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