IDEX Corporation
Industrials · Industrial Machinery & Supplies & Components
Structural: serial-acquirer industrial - ~50 niche brands rolled up since 1988 IPO under decentralized P&L model. Three segments roughly equal-weighted: FMT (pumps/flow meters, ~40% sales), HST (life-sci fluidics + analytical instrument components, ~35%), FSDP (fire/rescue/diversified, ~25%).
Sells mostly small-batch ($1k-$50k ASP) mission-critical components into OEM bills of materials - sticky, high-margin, low-cyclicality individually but aggregate cycles with global capex.
(1) HST is the hidden growth leg - supplies Waters $WAT, Agilent $A, Thermo $TMO, Danaher $DHR analytical instruments; rides the biopharma + diagnostics secular trend at industrial multiples; (2) decentralized M&A playbook is proven - ~20yr ROIC consistently 12-15%, EBITDA margins 26-28%, net debt/EBITDA <2x leaves dry powder; (3) Mott + Iridian + Muon acquisitions (2023-2025) deepen photonics/semi-equipment exposure aligned with $ASML + $KLAC capex; (4) defensive end-markets (water, fire safety, food/pharma) buffer industrial downcycles.
(1) organic growth has stalled - last 4 quarters net of price = low-single-digit volume decline as semi-equipment + industrial OEM destocking bites; (2) HST tied to instrument capex cycle - biotech funding winter + China bio-pharma slowdown drag 2024-2025 prints; (3) M&A premium baked in at ~22-24x forward EPS leaves little cushion if integration math slips; (4) decentralized model is operating-leverage light - limited synergy unlock vs.
peers like $ROP / $DHR; (5) FX + small-cap-EU exposure adds translation drag.
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