RBC Bearings Incorporated RBC recently announced that it has signed a definitive deal with ESCO Technologies Inc. ESE to acquire VACCO Industries for about $310 million in cash. RBC is expected to fund the transaction through borrowings under its current credit agreement and cash on hand.

RBC’s shares were down 1% yesterday to eventually close the trading session at $373.30.

Based in South El Monte, CA, VACCO is engaged in producing valves, filters, regulators and other precision components and subsystems for the space and naval defense sectors. The firm’s innovative engineered solutions are designed to support critical missions for customers across the defense, space and commercial markets. VACCO generated revenues of roughly $118 million in the trailing 12 months ended March 31, 2025.

Acquisition Rationale

The latest buyout is in sync with RBC Bearings’ policy of acquiring companies to strengthen its business and product portfolio. The inclusion of VACCO’s expertise in engineered valves, regulators and manifolds, supported by its strong designing, engineering and production capabilities, will enable RBC to expand its customer offerings in the defense, space and commercial markets. It will incorporate VACCO into its Aerospace and Defense segment.

Management expects the transaction to be completed this summer, conditioned on the fulfillment of certain customary closing conditions.

RBC’s Zacks Rank & Price Performance

RBC Bearings, with a $11.8 billion market capitalization, currently carries a Zacks Rank #4 (Sell). The company is grappling with rising operating costs and expenses. In first-quarter 2025, its cost of sales rose 3.8% year over year, while selling, general and administrative expenses increased 12% year over year. However, strength in its Aerospace/Defense segment, along with recovery in the Industrial unit, bodes well.Zacks Investment Research

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The company’s shares have gained 4.4% against the industry’s decline of 0.8% in the past three months.

The Zacks Consensus Estimate for RBC’s current-year earnings has declined 0.9% over the last 60 days.

Stocks to Consider

A couple of better-ranked stocks from the same space are discussed below.

The Gorman-Rupp Company GRC currently carries a Zacks Rank #2 (Buy). GRC delivered a trailing four-quarter average earnings surprise of 2.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past 60 days, the Zacks Consensus Estimate for Gorman-Rupp’s 2025 earnings has increased 0.5%.

Broadwind Energy BWEN currently carries a Zacks Rank of 2. BWEN delivered a trailing four-quarter average earnings surprise of 61.1%. In the past 60 days, the consensus estimate for Broadwind Energy’s 2025 earnings has increased 33.2%.

Story Continues

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RBC Bearings Incorporated (RBC):Free Stock Analysis Report

ESCO Technologies Inc. (ESE):Free Stock Analysis Report

Gorman-Rupp Company (The) (GRC):Free Stock Analysis Report

Broadwind Energy, Inc. (BWEN):Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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