Kadant's Big Move: Acquiring Key Knife For $156M To Fortify Wood Product Industry Solutions
Portfolio Pulse from Lekha Gupta
Kadant Inc (NYSE:KAI) has announced the acquisition of Key Knife, Inc. for approximately $156 million in cash. Key Knife, a supplier of engineered knife systems for the wood product industry, reported $65 million in revenue for the trailing twelve months ended September 30, 2023. The acquisition, expected to close in early January 2024, will be financed primarily through Kadant's revolving credit facility. Kadant's cash position as of September 30 was $79.1 million. KAI shares dropped slightly by 0.40% to close at $284.23.
December 29, 2023 | 11:07 am
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Kadant Inc is set to acquire Key Knife for $156 million, aiming to enhance its wood processing product portfolio. The deal is financed through credit and is expected to close in early January 2024.
The acquisition of Key Knife is likely to be viewed positively as it expands Kadant's product offerings and could lead to increased market share in the wood processing industry. The deal is sizable in relation to Kadant's cash position, but the company appears to have a solid plan for financing. The slight dip in stock price on the announcement day may be due to market digestion of the news, but the strategic nature of the acquisition suggests a potential for positive short-term impact.
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