Brady Corporation

Brady Corporation has completed its all-cash acquisition of Honeywell Technologies' Productivity Solutions and Services business for $1.4 billion, effective August 3. The acquired business generated sales of approximately $1.1 billion in 2025 and is expected to contribute about $0.80 of incremental adjusted diluted earnings per share within the first year after closing. Brady will now operate with two reportable segments: Identification Solutions for its existing business and Intelligent Productivity Solutions for the PSS business. The company expects to achieve at least $25 million in annual run-rate cost synergies within three years and projects net debt-to-EBITDA of approximately 2.5 times, deleveraging to below 2.0 times within two years. The transaction was funded with cash on hand, a senior unsecured credit facility, and private placement debt.

Brady reported first-quarter revenues of $435.2 million, up 13.8% year on year and exceeding analysts' expectations by 7.2%, making it the top performer among six safety and security services stocks tracked. The company also delivered an impressive beat of analysts' full-year EPS guidance estimates, driven by strong organic sales growth globally and new product launches. MSA Safety posted revenues of $463.6 million, up 10% year on year and beating estimates by 2.7%, while Motorola Solutions reported $2.71 billion in revenues, up 7.4% year on year and exceeding estimates by 0.6%. GEO Group achieved the highest full-year guidance raise among its peers with revenues of $705.2 million, up 16.6% year on year, and Brink's reported $1.38 billion in revenues, up 10.3% year on year. As a group, the six companies beat revenue consensus estimates by 2.5% and saw their share prices rise 27.5% on average since reporting.

Brady represents a compelling long-term investment opportunity driven by data center demand and a transformative acquisition from Honeywell. The company's labeling and identification products are essential in industrial settings, with data center labeling accounting for 20% of Americas and Asia sales and growing 20% in the last reported quarter. Brady is acquiring Honeywell's Productivity Solutions and Services business for $1.4 billion, or 8 times trailing EBITDA, which is expected to add larger customers and generate $25 million in cost savings over three years. Wall Street anticipates over 14% annual earnings-per-share growth from 2025 to 2028, and the stock trades at less than 15 times estimated 2027 earnings, an attractive valuation for its growth prospects.

MillerKnoll reported first-quarter revenues of $926.6 million, up 5.8% year on year but missing analyst expectations by 1.6%, making it the weakest performer in a group of 20 tracked business services and supplies stocks. The company also significantly missed earnings per share estimates and provided the weakest guidance update of the entire group. In contrast, Brady delivered the strongest results with revenues of $435.2 million, a 13.8% increase that beat expectations by 7.2%, while CECO Environmental posted a 16.5% revenue gain to $205.9 million and raised its full-year outlook. Overall, the sector saw revenues beat consensus estimates by 2.4% and share prices rise an average of 10.6% since the latest earnings reports.

Safety and security services stocks delivered a very strong first quarter, with the six companies tracked by StockStory beating revenue estimates by 2.5% on average and next-quarter revenue guidance coming in line. CoreCivic reported revenues of $614.7 million, up 25.8% year on year and exceeding expectations by 1.9%, making it the fastest-growing company in the group. Brady posted the biggest analyst estimate beat with revenues of $435.2 million, up 13.8% and surpassing forecasts by 7.2%. GEO Group recorded the highest full-year guidance raise among its peers, with revenues of $705.2 million, up 16.6% and beating estimates by 1.8%. Motorola Solutions, the weakest performer relative to estimates, reported revenues of $2.71 billion, up 7.4% and exceeding expectations by 0.6%, while Brink's revenues came in at $1.38 billion, up 10.3% and beating by 0.9%. Since reporting, CoreCivic shares are up 33.2%, GEO Group up 58.2%, Brady up 17.6%, Brink's down 2.1%, and Motorola Solutions down 7.3%.