Weg (WEGE3) buys Balteau Electrical Products and expands its portfolio

Weg (WEGE3) buys Balteau Electrical Products and expands its portfolio
Weg factory. Photo: weg.net – Reproduction

The Brazilian multinational Weg (WEGE3) signed a contract to acquire 100% of Balteau Produtos Elétricos, a transformer company for instruments and measuring sets, located in Itajubá, in the State of Minas Gerais. The company did not inform the transaction amount.

In a statement to the market released on Tuesday (14), Weg informs that the Balteau it has an industrial park of 11,800 m² of built area and has state-of-the-art equipment and facilities.

THE transformer company has 350 employees and specializes in design, manufacturing, electrical testing and technical assistance for products that Weg does not currently have in its portfolio. Are they:

  • current and capacitive potential transformers up to 550kV,
  • inductive potential transformers up to 145kV, and
  • measuring sets up to 36kV.

According to Weg, Balteau’s net revenue in 2020 was R$ 121.7 million.

The consolidation of the transaction is subject to compliance with certain conditions, including approval by CADE (Administrative Council for Economic Defense).

In a document, Weg emphasizes that “the amount paid in said acquisition does not represent a relevant investment for the acquirer”.

XP starts Weg coverage with purchase recommendation

XP started Weg coverage on August 3rd, with a purchase recommendation and a target price of R$ 55 per WEGE3 action by the end of this year. For 2022, the broker placed the target price of R$50.

In a report, XP assesses that Weg “is well positioned to sustain its solid value profile”, citing four reasons:

  • Favorable macro scenarios to support the short to medium term revenue momentum;
  • Long-term growth supported by internationalization and its innovative DNA towards high-growth and still unexplored markets
  • Solid execution to sustain your high levels of return
  • Strong positioning in relation to the ESG agenda (environment, social and corporate governance)

In addition, analysts state that, “in terms of valuation, we note the consistent premium of WEG vs. global pairs.”

last quote

After the trading session on Monday (13), the Weg quotation the Ibovespa closed up 0.49%, with shares worth R$ 38.90.

In the last 12 months, the actions of Weg accumulate appreciation of 22.75%, with a maximum price of R$46.46 and a minimum of R$30.04.