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Trinity (TRN) to Gain From Holden America Buyout: Here's How

Trinity Industries, Inc.TRN recently announced that it has completed the acquisition of Holden America for an initial purchase price of $70 million. This price includes an additional $5 million per year for the next two years.

Holden America is a manufacturer of multi-level vehicle securement and protection systems, gravity-outlet gates and gate accessories for freight rail in North America. Per the terms of the deal, all the employees of Holden America will join Trinity.

The acquisition was completed on Dec 30, 2022.

How Will Trinity Benefit?

This acquisition offers a bi-level chock system to Trinity. Along with its existing tri-level chock system, the deal is also expected to boost Trinity’s competitive position as a manufacturer of autoracks in North America. This should help TRN flourish further in an improving automobile end market.

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Considering the ongoing automobile preference shift toward sport utility vehicles and heavier electric vehicles, securement systems are likely to get more complex and demand for chock systems should rise accordingly. Hence, the latest deal seems to be a prudent move on Trinity’s part to strengthen its competitive position (as a chock provider) in the automobile industry.

Jean Savage, Trinity’s president and chief executive officer, stated, "This acquisition fits well into our strategy to increase exposure to less cyclical and higher margin aftermarket parts, giving us more opportunities to serve our customers and diversify our revenue stream."

Shares of Trinity have gained 21.8% over the past six months compared with 23.9% growth of the industry it belongs to.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Zacks Rank and Stocks to Consider

Trinity currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader Zacks Transportation sector are American Airlines (AAL), Teekay Tankers Ltd. (TNK) and Gol Linhas Aereas Inteligentes S.A. GOL. American Airlines and Teekay Tankers sport a Zacks Rank #1 (Strong Buy), while Gol Linhas currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AAL has an expected earnings growth rate of more than 100% for the current year. AAL delivered a trailing four-quarter earnings surprise of 8.62%, on average.

The Zacks Consensus Estimate for AAL’s current-year earnings has improved 19.3% over the past 90 days. Shares of AAL have gained 5.6% over the past six months.

Teekay Tankers has an expected earnings growth rate of 143.11% for the current year. TNK delivered a trailing four-quarter earnings surprise of 42.23%, on average. Teekay Tankers has a long-term expected growth rate of 3%.

The Zacks Consensus Estimate for TNK’s current-year earnings has improved more than 100% over the past 90 days. Shares of TNK have soared 67.9% over the past six months.

Gol Linhas has an expected earnings growth rate of 50.9% for the current year.

Shares of GOL have gained 6.4% over the past three months.

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Gol Linhas Aereas Inteligentes S.A. (GOL) : Free Stock Analysis Report

American Airlines Group Inc. (AAL) : Free Stock Analysis Report

Trinity Industries, Inc. (TRN) : Free Stock Analysis Report

Teekay Tankers Ltd. (TNK) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research