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Mueller Water Products (NYSE:MWA) +1.2% In trading Thursday, RBC analyst Deane Dray named it the industrial company most likely to be acquired this year.
Mueller (MWA) is small, Mueller is relatively small with a market cap of ~$2.5B, has an activist investor who could push for a sale, and finding a permanent CEO candidate took more than nine months, Dray says, noting that the company’s promising smart water technologies business could be eliminated and legacy hydrant and specialty valve businesses could end up with a private equity or industrial company. flow owner.
With the modernization of the new smelter largely complete and full pace of operations expected by the end of 2024, Dray sees the possibility of increased interest in the company with a line of sight toward completing the new smelter.
Dray’s “runner-up” as a potential takeover target is Wesco (WCC), believing the stock’s undemanding valuation of 8.2x estimated 2024 EBITDA multiple, positive progress in deleveraging, and a strong position of market leaders could induce private equity buyers to take the company private through a leveraged buyout.
The analyst “most likely to attract activist interest” is Johnson Controls (JCI), noting the recent “leak” of a strategic review for its residential HVAC business suggests that activist investors may have gotten involved, as they often push for divestitures or spin-offs to unlock shareholder value, even though “if it were easy, it would have been done long ago.”