Business-to-business rental company McGrath RentCorp has acquired Kitchens To Go. The latter provides modular solutions to food service providers that need flexible facilities.
McGrath RentCorp (MGRC) President and CEO Joe Hanna said, “Our acquisition of Kitchens To Go is highly complementary to our modular building rental business. As we expand our ability to provide solutions to our customers, there are opportunities for us to serve businesses that have a temporary facilities need with their food service projects.”
Hanna added, “We now have another product line that is a logical adjacency to our core business and we look forward to growing it together.” (See McGrath RentCorp stock analysis on TipRanks)
This acquisition enables the Mobile Modular division of McGrath RentCorp to offer temporary and customized permanent food service facilities nationally.
Furthermore, the acquisition expands the capabilities of Mobile Modular to service customers in the education, commercial, healthcare, and hospitality industries.
Recently, Oppenheimer analyst Scott Schneeberger reiterated a Buy rating on the stock and increased the price target to $84 price target (3.1% upside potential) from $74.
Schneeberger commented, “Solid performance across two of MGRC’s three primary segments should net respectable adjusted EBITDA and solid valuation upon emergence from the challenging COVID-19 environment.”
The other analyst covering the stock, Sidoti’s Marc Riddick also has a Buy rating on the stock with a $98 price target (20.3% upside potential).
The two ratings add up to a Moderate Buy consensus rating with a $91 average analyst price target, indicating an upside potential of 11.7%. Shares have gained about 46.2% over the past year.
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