Zacks_Analysts' Blog : LEG Acquires Western Pneumatic - Analyst Blog

Missouri-based, Leggett and Platt Inc. (LEG) recently announced the end of the acquisition procedure, initiated in December 2011, of Washington-based Western Pneumatic Tube Holding, LLC.

It is anticipated that the all-cash transaction, valued at $188 million, would be slightly accretive to Leggett and Platt’s earnings in the first year of acquisition and will form a new business unit within the company’s Industrial Materials segment.

Western Pneumatic Tube Holding is a leading provider to the aerospace industry of integral components for critical aircraft systems, including fuel, hydraulic, pneumatic, environmental, stability, life support and cooling. Employee strength is approximately 140 people.

Leggett and Platt is one of the leading manufacturers of components of residential and office furniture, carpet underlay, drawn steel wire and automotive seat support and lumbar systems in North America. The company follows a policy of acquiring high quality businesses to achieve its long-term annual growth target of 4% to 5%.

Of late, in its third quarter results, the company’s earnings per share of 31 cents fell short of the Zacks Consensus by 5 cents. Revenue surged 8.6% backed by increased pricing and favorable currency translations.

Leggett & Platt expects its full year 2011 earnings per share to be within the 99 cents to $1.04 range due to a non-cash and pre-tax charge of nearly $36 million planned in the fourth quarter of 2011. The charge is expected to mainly relate to restructuring activity, including the discontinuation of some manufacturing facilities.The current guidance is a revision from the company’s prior guidance range of $1.15-$1.20

The company is slated to release its fourth quarter results on February 6, 2012.

The current Zacks Consensus Estimates for the fiscal years 2011 and 2012 are $1.19 and $1.42, representing year-over-year growth of 2.44% and 19.21%, respectively. Estimate for the fourth quarter is 21 cents, representing annual decline of 0.79%.