AGB 2023.7 - Ametek (AME)

Organic + Acquisitions Growth

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In our study of different industrial conglomerates, it’s interesting to see the nuances in the different capital allocation strategies. We’ve studied Roper, HEICO and TransDigm and plan to study others in future write-ups. Because of Ametek’s choice of acquisitions (mainly the relatively smaller deal sizes but also specific industries), the company seems to have ample room for operational improvement and internal reinvestment opportunities. This can be evidenced by the Ametek’s returns on capital and organic growth cadence. The smaller deal sizes also allow for lower multiples on acquisitions (though they have been increasing recently), which make Ametek’s internal return targets easier to achieve.

Ametek

Ametek is a leading industrial conglomerate specializing in electronic instruments and electromechanical devices. The company is a serial acquirer of businesses that have technology differentiation within specific ind…