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Robert Baird Hikes Tecumseh Rating


Tecumseh Products (TECUA) agreed to purchase Invensys' electric motors operations for $415 million. Robert Baird upgraded its rating on the shares to outperform from neutral.

Analyst Michael Schneider says the deal should spark the stock on significant GAAP earnings accretion generated by the acquisition. He says Tecumseh been poised for some time to deploy its excessive cash of $370 million ($20 per share). But he notes the deal arguably places the company in another price-competitive market without dramatic synergies. Schneider says the acquisition thrusts Tecumseh into a merchant market competing against well-established, larger global competitors. Schneider asks: Compressors are tough enough; why electric motors


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