Valmont Industries Inc. has acquired a 90 percent stake in a Danish manufacturer.
The Omaha-based company announced late Monday its acquisition of DS SM A/S, which supplies steel structures to customers in the electric utility industry and to companies working in wind energy and oil and gas exploration.
Terms of the transaction have not yet been disclosed.
The Denmark-based company will be renamed Valmont SM A/S and its management team will join Valmont. It has two manufacturing facilities and employs about 770 people.
Valmont’s entry into the energy production industries is something new for the company, but company officials called it a good fit.
On top of opportunities in growing markets for wind energy and oil and gas exploration, Vik Bansal, group president of Valmont’s global engineered infrastructure products segment, said the acquisition gives the company “an attractive platform to expand our engineered infrastructure product lines across a broader geographic footprint.”
Kevin Bennett, an analyst with Sterne Agee Group Inc., said the deal should be well-received by investors.
“I like this deal because it addresses two major investor concerns that are growth outside of irrigation and use of cash reserves,” Bennett said. “Valmont had $614 million in cash reserves at the end of the year and it was growing, so I would much rather see them find a deal like this than buy back stock.”
Valmont manufactures poles and other steel structures for lighting, traffic control, wireless communication and power utilities markets. It also makes mechanized irrigation equipment and industrial systems.