Tetra Tech Enhances Analytics Business With BlueWater Buyout

Tetra Tech, Inc. TTEK recently announced that it has completed the acquisition of information technology systems and services company, BlueWater Federal Solutions, Inc. Financial terms of the deal were kept under wraps.

Tetra Tech’s shares were up 0.4% yesterday to close at $94.97.

Inside the Headlines

Chantilly, VA-based BlueWater is engaged in offering Enterprise IT solutions, engineering, cybersecurity and applications development solutions. The company, which employs in excess of 350 employees, has a strong customer base across the U.S. federal sector, which includes the likes of Department of Defense and Department of Energy.

Apart from enhancing its customer reach, the buyout will enable Tetra Tech to strengthen its advanced analytics business. In fact, BlueWater’s comprehensive offerings of IT solutions and services will help Tetra Tech in boosting its capabilities in cybersecurity solutions, artificial intelligence and mission-critical services for its federal clients.

BlueWater will be part of the company’s Government Services Group business segment. The segment offers consulting and engineering services globally for a wide range of U.S. government clients. Net sales of Government Services Group were $319.2 million in the third quarter of fiscal 2020 (ended Jun 28, 2020).

Other Notable Buyouts

In February 2020, Tetra Tech acquired Segue Technologies. This buyout has been strengthening Tetra Tech’s business associated with government clients, especially the U.S. Department of Defense and commercial customers.

Also, in July 2019, it acquired shares of WYG plc, a provider of engineering and consulting services. The buyout has been enabling Tetra Tech to strengthen its international development business for the U.K.’s Department for International Development and the European Union.

Zacks Rank, Estimates and Price Performance

Tetra Tech, with a $5.1-billion market capitalization, currently carries a Zacks Rank #3 (Hold). High federal government spending and solid demand for the company’s services bode well. Also, acquisitions made by it over the past few quarters are likely to prove beneficial. However, reduction in oil and gas capital expenditure, commercial buildings work, and some industrial manufacturing programs will adversely impact its near-term results.

In the past 60 days, earnings estimates for Tetra Tech have improved. The Zacks Consensus Estimate for its earnings is pegged at $3.17 for fiscal 2020 (ending September 2020) and $3.38 for fiscal 2021 (ending September 2021), up 1.3% and 2.4%, respectively, from the 60-day-ago figures.

The company’s shares have gained 20.2% compared with 8.9% growth recorded by the industry in the past three months.

Stocks to Consider

Some better-ranked stocks from the Zacks Industrial Products sector are II-VI Incorporated IIVI, CECO Environmental Corp. CECE and Casella Waste Systems, Inc. CWST. While II-VI currently sports a Zacks Rank #1 (Strong Buy), CECO and Casella carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

II-VI delivered a positive earnings surprise of 64.90%, on average, in the trailing four quarters.

CECO delivered a positive earnings surprise of 49.13%, on average, in the trailing four quarters.

Casella delivered a positive earnings surprise of 158.08%, on average, in the trailing four quarters.

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