Graco Inc. closed its acquisition of Valco Melton for $447 million in cash on August 31, expanding into adhesive dispensing and quality assurance technology weeks after posting record second-quarter results. The industrial fluid handling company reported net sales up 3% to $590.6 million, operating earnings up 11% to $175.1 million, and diluted earnings per share up 14% to $0.87, with adjusted per-share profit up 17% to $0.91. Graco attributed the sales increase primarily to acquired operations rather than organic demand, and its full-year guidance still calls for only low single-digit organic sales growth on a constant currency basis, while management cited tariff refunds and lower operating expenses as the main drivers of the higher gross margin rate. Valco Melton, which builds adhesive application and quality-check systems mainly for packaging customers, brought in about $145 million in revenue in 2025 with roughly 650 employees serving customers in more than 80 countries, and folds into Graco's Industrial segment. The price works out to roughly 14 times the target's 2025 adjusted EBITDA, or about 10 times 2026 estimated earnings once synergies and a roughly $40 million tax benefit are factored in, and Graco changed its non-GAAP methodology this quarter to strip acquisition costs and intangible amortization out of adjusted earnings going forward. Hedge fund ownership fell from 37 funds to 35 in the most recent quarter, short interest sits at 5.08% of the float, and shares trade at a forward P/E of 21.74 as of September 21.
Graco IncGraco closed its $447M Valco Melton acquisition and posted record Q2 results with EPS up 14% and operating earnings up 11%.
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