Brookfield Acquires Fosber for $900M in Strategic Move
Written by Emily J. Thompson, Senior Investment Analyst
Brookfield, through its private equity strategy, has agreed to acquire Fosber, a global leader in the design and production of advanced machinery, parts, and services for the corrugated packaging industry. The transaction, a carve-out from Guangdong Dongfang Precision, values the business at approximately $900M. Founded in 1978 and headquartered in Lucca, Italy, Fosber designs and manufactures high-speed corrugating machinery and provides vital aftersales parts, maintenance and digital monitoring solutions to box manufacturers worldwide. With operations across Italy, the U.S., and China, Fosber is recognized for its innovative product and technology development, and strong customer service. Brookfield's investment through its Brookfield Capital Partners strategy is being funded with approximately $480M of equity, of which its affiliate Brookfield Business Partners is expected to invest approximately $170M. The transaction is subject to customary regulatory approvals and is expected to close in 2026.
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Analyst Views on BBU
Wall Street analysts forecast BBU stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for BBU is 37.41 USD with a low forecast of 30.23 USD and a high forecast of 43.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
3 Analyst Rating
3 Buy
0 Hold
0 Sell
Strong Buy
Current: 34.570
Low
30.23
Averages
37.41
High
43.00
Current: 34.570
Low
30.23
Averages
37.41
High
43.00
About BBU
Brookfield Business Partners L.P. is a Bermuda-based company that is focused on owning and operating businesses that provide essential products and services. Its sole direct investment is managing a general partnership interest in Brookfield Business L.P., through which it holds all its interests in its operating businesses. It has four operating segments: Business services, Infrastructure services, Industrials, and Corporate and other. Its business services segment includes a residential mortgage insurer, dealer software and technology services, healthcare services, non-bank financial services, and entertainment operation. Its infrastructure services segment includes services such as offshore oil, modular building leasing, and work access. Its industrials segment includes operations such as advanced energy storage, engineered components manufacturing, and water and wastewater. Its operations are located in the United States, the United Kingdom, Europe, Australia, Canada, and Brazil.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Brookfield Business Partners Set to Release Q4 Earnings
- Earnings Announcement Date: Brookfield Business Partners is set to announce its Q4 2023 earnings on January 29th after market close, with a consensus EPS estimate of -$0.15, indicating potential profitability challenges ahead.
- Historical Performance Review: Over the past year, BBU has beaten EPS estimates 50% of the time and revenue estimates 75% of the time, demonstrating a degree of resilience amid market fluctuations.
- Expectation Adjustments: In the last three months, there have been no upward revisions to EPS estimates, with one downward revision, suggesting a decline in analyst confidence regarding the company's future profitability.
- Market Attention: As the earnings report approaches, investor and analyst focus on Brookfield Business Partners is increasing, particularly against the backdrop of questions surrounding its performance as a Brookfield affiliate.
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Brookfield Asset Management Stock Pullback Boosts Dividend Yield to 3.4%
- Stable Dividend Growth: Brookfield Asset Management has consistently paid dividends quarterly since its spin-off in late 2022, with the current payout rising from $0.32 to nearly $0.44 per share, reflecting an annualized growth rate of nearly 11%, showcasing the company's commitment to shareholder returns.
- Strong Market Positioning: The infrastructure and renewable energy sectors managed by Brookfield are in rapid growth, highlighted by a 20-year electricity sales agreement with Alphabet, which is expected to drive future growth of 15% to 20%, further solidifying its market position.
- Investor Appeal: With the stock trading around $52, analysts suggest it remains a buy below $55, particularly given its attractive dividend yield and growth potential, appealing to income-focused investors seeking stability.
- Market Volatility Risks: Despite Brookfield's strong fundamentals, ongoing market weakness could lead to further declines in stock price, prompting investors to remain vigilant and avoid impulsive decisions due to short-term fluctuations.
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