Topic: How To Invest

Stock Pickers Digest Hotline – Friday, September 1, 2017

Article Excerpt

TOROMONT INDUSTRIES LTD., $53.07, symbol TIH on Toronto, distributes a range of industrial equipment, including machinery made by Caterpillar Inc. It also makes refrigeration systems through its CIMCO business. The stock jumped 18% this week after the company agreed to buy privately held Hewitt Group. That firm is the exclusive distributor of Caterpillar equipment in Quebec and Atlantic Canada. The new operations nicely complement Toromont’s existing Caterpillar branches in Ontario, Manitoba and Nunavut. As well, buying Hewitt will help the company profit from new mining and infrastructure projects in Quebec. The $1.02 billion price consists of $917.7 million in cash plus 2.25 million Toromont shares. Hewitt should add $1.0 billion to Toromont’s annual revenue of about $1.9 billion. The company expects to complete the purchase in the next few weeks. Toromont will borrow most of the cash it needs to buy Hewitt. That will increase its long-term debt of $150.0 million (as of June 30, 2017) to around $900 million. Even so, that’s…