As The Colfax Chapter Ends, Both ESAB And Enovis Have Something To Prove

By the time this is published, Colfax (NYSE:CFX) will no longer exist as it did before, with the company changing its name to Enovis (ENOV) and keeping the medical business, while spinning out 90% of the welding business ESAB (ESAB.WI) to shareholders. In executing on this transaction, I believe management is hoping to unlock more value on the med-tech side, with the idea being that a nearly debt-free mid-cap med-tech company with growth potential should obtain a better valuation on its own than it could blended in with ESAB.

I was mixed on Colfax’s prospects a year ago, as I thought turbulence related to the split and operational challenges in the med-tech business could still weigh on the shares, but that there was likely more value here than was being reflected in the share price. The stock underperformed since then, and while I do see opportunities here, there are challenges ahead for both businesses.

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As The Colfax Chapter Ends, Both ESAB And Enovis Have Something To Prove