Lowe's Buys Artisan Design Group, Bullish Analyst Explains Synergies

Lowe’s Companies Inc. LOW announced Monday that it has entered into a definitive agreement to acquire Artisan Design Group (ADG) from The Sterling Group for $1.325 billion.

"The biggest synergy opportunity is on the topline,"according to JPMorgan. 

The Lowe’s Companies Analyst: Analyst Christopher Horvers reiterated an Overweight rating for the stock.

The Lowe’s Companies Thesis: The deal, which the company plans to finance with cash on hand, is expected to close in the second quarter, Horvers said in the note.

Check out other analyst stock ratings.

The acquisition will extend Lowe’s exclusive Stainmaster flooring brand to Artisan Design Group's installer contractors and "expanding ADG into other categories while leveraging LOW's immense buying power," he added.

"There are also modest backoffice and supply chain synergies," the analyst wrote. Management believes this acquisition is a "natural next step for growth," he further stated.

LOW Price Action: Shares of Lowe’s Companies had declined by 0.23% to $223.62 at the time of publication on Tuesday.

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