11:55 AM EDT, 08/22/2024 (MT Newswires) -- Flowserve's ( FLS ) agreement to acquire Mogas Industries is a strategic fit and supports the "diversify" aspect of the growth strategy, UBS Securities said Thursday in a report.

On Aug. 13, Flowserve ( FLS ) agreed to acquire Mogas for $290 million in cash. Houston-based Mogas makes severe service isolation valves and serves a variety of end markets, including mining, power and process industries. The transaction is expected to close in Q4.

Flowserve ( FLS ) expects the acquisition to boost adjusted earnings per share starting in the first full year with Mogas projected to contribute $200 million in sales and high-teens EBITDA margins.

"We estimate that deal should be $0.15 accretive to 2025 EPS and $0.29 accretive by 2026 assuming full synergy realization and interest expense offset," UBS said.

UBS has a buy rating on Flowserve ( FLS ) with a 12-month price target of $54.

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