Scott had $3.5 million cash in hand in the previous financial year and will be carrying a forecast debt of $5.6 million when it reports its full-year-to-August result in October.
ABN Amro Craigs broker Peter McIntyre said the company had $4.3 million in working capital.
"In this [economic] environment, it leaves Scott in a very strong position, especially if they want to consider more acquisitions," he said, when contacted.
Research by ABN indicated Rocklabs' revenue was expected to nearly double Scott's revenues, which have been down, and help reduce the cyclical nature of its earnings from its offshore manufacturing orders.
Scott was understood to have paid between $8 million to $10 million for Rocklabs, which exports automated sample preparation equipment to 98 countries.
It paid former owner and current chief executive Dr Ian Devereux $4 million, garnered from the issue of 3.31 million Scott shares - an 11.7% stake - and borrowing the balance of the purchase price.
Mr McIntyre estimated Rocklabs revenues would be between $15 million and $20 million, with earnings before interest and tax of about $2.5 million, offsetting Scott's losses and clawing back a forecast $2 million loss to around $700,000 for the 2008 full-year result.
"We've raised our earnings forecast, given the Rocklabs acquisition. It appears to be an excellent and complimentary fit for Scott," Mr McIntyre said.
He noted Scott and Rocklabs, while in different sectors, both focused on overseas niche markets and utilised similar engineering skills.
Scott's engineering team at its Dunedin automation venture could potentially be of use to Rocklabs, with its emphasis on mechanisation and automation in its sampling products.
ABN upgraded its stock recommendation from "sell" to "buy" and increased Scott's 12-month target price almost 17%, from $1.25 to $1.46.
Stock has been trading around $1.17.
In April, Scott, which has had to contend with a strong New Zealand dollar for the past two years, reported an $836,000 loss for the six months to February, compared with a $1.2 million profit for the same period a year earlier.
At the time, it confirmed two multimillion-dollar orders to Brazil and Australia for its appliance line manufacturing, which is done in Christchurch, and orders for its robotic meat-processing machines, which are a joint-venture development with Silver Fern Farms in Dunedin.
Group sales for the six months were $8.3 million, $6 million down on the $14.3 million recorded for the same period a year earlier.
Construction of Scott's $3 million development in Kaikorai Valley is nearing completion.
The new site is one and a-half times larger than its Cumberland St site.
About 65 staff are due to relocate to the 3.2ha site (1ha industrial zoned land and 2.2ha rural zoned) land.
Office staff will move in late September and the workshop in late October.
Peter McIntyre's financial disclosure document is available on request.
