Worthington Enterprises Buys LSI for $205M, Boosting Building Products Unit
Acquisition of metal roof components maker comes as the company posts a 19% surge in quarterly revenue, though shares pull back in recent trading.
Worthington Enterprises announced it has agreed to acquire LSI Group, a leading manufacturer of metal roof components, for approximately $205 million. The deal marks a significant investment in Worthington's Building Products segment and was announced concurrently with a strong fiscal second-quarter earnings report that beat expectations.
The acquisition, detailed in a company announcement, signals a focused strategy of expansion for Worthington following the spin-off of its steel processing business. LSI Group, based in Indiana, will bolster Worthington's portfolio of high-value construction and architectural components.
The news came as Worthington posted robust financial results for its second quarter. The company reported net sales of $327.5 million, a 19% increase from the prior year, according to its earnings release. This top-line growth was complemented by a 45.8% year-over-year increase in quarterly earnings, underscoring strong operational momentum.
Despite the positive catalysts of a strategic acquisition and a strong earnings beat, shares of Worthington Enterprises (NYSE: WOR) were down about 2.5% in recent trading to $56.29. The move may reflect broader market trends or profit-taking by investors after a strong run-up in the stock. Over the past 52 weeks, shares have traded between a low of $37.50 and a high of $70.70.
However, Wall Street analysts remain broadly optimistic about the company's prospects. Based on ratings from four analysts, Worthington holds two "Buy" ratings and one "Strong Buy," with an average price target of $68.20, implying a potential upside of over 20% from its current price. The company's forward price-to-earnings ratio of 16 suggests expectations for continued earnings growth, a sentiment supported by a low PEG ratio of 0.35, which can indicate a stock is undervalued relative to its growth prospects.
With a market capitalization of approximately $2.9 billion, Worthington Enterprises is positioning itself as a more focused industrial manufacturing company. Its operations span building products, consumer products, and sustainable energy solutions. The acquisition of LSI aligns directly with this strategy, expanding its footprint in the profitable building and construction market.
Adding to the day's corporate news, Worthington also declared a quarterly dividend of $0.19 per share, reinforcing its commitment to returning capital to shareholders. The combination of aggressive strategic investment, strong organic growth, and consistent shareholder returns paints a picture of a company executing a clear, forward-looking plan, even as its stock price takes a momentary pause.