Zebra Technologies Corporation ZBRA yesterday announced that it will acquire all the shares of Xplore Technologies Corp. XPLR. The acquisition, to be accomplished through a tender offer, has been approved by the boards of directors of the companies.

Austin, TX-based Xplore Technologies primarily engages in manufacturing 2-in-1 laptops, rugged mobile computers (semi, fully and ultra rugged) and accessories. The products are used in various end-markets, including transportation & logistics, manufacturing, retail, and healthcare. For fiscal 2018 (ended Mar 31, 2018), Xplore Technologies generated roughly $86.9 million in revenues.

Detail of Buyout

As noted, Zebra Technologies will acquire Xplore Technologies’ outstanding shares for cash of $6.00 per share. The buyout will be accomplished through a public tender offer. The total consideration (including assumed indebtedness), predicted to be less-than-equal to $90 million, is likely to be funded through available cash and borrowings under the credit facility.

The buyout of Xplore Technologies will add rugged tablet portfolio to Zebra Technologies’ portfolio and add more zeal to the company’s existing data capture, mobile computing, and printing businesses. Also, the buyout will provide Zebra Technologies an easy access to penetrate in public safety, utility, oil & gas, and government end markets. Business opportunities from various enterprise customers will also accelerate.

For 2018, Zebra Technologies predicts a neutral impact of the buyout of Xplore Technologies while anticipates earnings accretion thereafter.

Subject to the fulfillment of customary closing conditions, Zebra Technologies anticipates completing the acquisition in the third quarter of calendar 2018.

Zacks Rank & Key Picks

With a market capitalization of nearly $7.9 billion, Zebra Technologies currently sports a Zacks Rank #1 (Strong Buy). We believe that the company’s inorganic initiatives will add more vigor to its product offerings and help in keeping market sentiments positive for the stock.

Zebra Technologies’ shares have rallied roughly 8.9% in the past three months. The three-month gain comfortably surpassed 19.7% decline of the industry.

Also, the company’s earnings estimates have been revised upward in the past 60 days. Currently, the Zacks Consensus Estimate of $9.85 for 2018 and $10.50 for 2019 reflects growth of 5.9% and 4.4% from the respective 60-day-ago tallies.

Zebra Technologies Corporation Price and Consensus

Zebra Technologies Corporation Price and Consensus | Zebra Technologies Corporation Quote

Other top-ranked stocks worth considering in the Zacks Industrial Products sector are Regal Beloit Corporation RBC and ForeScout Technologies, Inc. FSCT. While Regal Beloit sports a Zacks Rank #1, ForeScout Technologies carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, bottom-line estimates for both of these stocks have improved for the current year. Also, average positive earnings surprise for last four quarters has been 1.60% for Regal Beloit and 27.20% for ForeScout Technologies.

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Xplore Technologies Corp (XPLR): Free Stock Analysis Report
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