Flowserve Corporation (FLS) closed the previously announced buyout of the Itzehoe, Germany-based engineered vacuum and fluid pumps provider, SIHI Group B.V. The transaction was valued at about €298 million ($372.5 million).

SIHI Group specializes in providing engineered vacuum and fluid pumps along with related aftermarket services. Key markets served by the company include chemical, pharmaceutical, food & beverage as well as other process industries. The company enjoys foothold across regions like Europe, the Americas and Asia.

Achieving strong synergies from this acquisition, Flowserve’s prowess in chemical pump along with engineering and manufacturing services got a significant boost. This apart, the acquisition enhances the company’s margins by leveraging the economies of scale and is expected to be a critical growth factor for Flowserve, going forward.

After the integration of the acquired company, Flowserve’s Industrial Product Division (‘IPD’) segment margins are expected to be enhanced by 14–15%. Comprehensive synergies from the acquisition are likely to be realized by the start of 2017.

As a matter of fact, Flowserve has been consistently focused on growth and realignment of its portfolio so as to improve both its aftermarket business and margins. Also, the company is dedicated towards rewarding investors, in the form of share repurchases and dividend, with a share of its success. In Nov 2014, Flowserve authorized a replenished share buyback worth $500 million and declared the quarterly cash dividend rate (read more: Flowserve Authorizes Fresh Buyback, Declares Dividend). Such initiatives enhance investors’ confidence in the stock.

Flowserve currently has a Zacks Rank #3 (Hold). Investors interested in mechanical-general industrial stocks may consider better-ranked players like The Babcock & Wilcox Company (BWC), Ingersoll-Rand Plc (IR) and Middleby Corp. (MIDD). While Babcock & Wilcox carries a Zacks Rank #1 (Strong Buy), Ingersoll-Rand and Middleby have a Zacks Rank #2 (Buy).

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