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Albemarle (ALB) Inks Deal to Acquire Guangxi Tianyuan for $200M

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Albemarle Corporation ALB recently announced that it has signed a definitive deal to acquire all of the outstanding equity of Guangxi Tianyuan New Energy Materials Co., Ltd. The latter is a lithium converter located in Guangxi, China.

Per the agreement, Albemarle will acquire all outstanding equity from Tianyuan's stockholders for roughly $200 million, subject to certain adjustments. Albemarle projects the deal to close in early 2022, subject to customary closing conditions.

Tianyuan's operations include a recently-constructed lithium processing plant strategically located near the Port of Qinzhou in Guangxi. The plant has designed annual conversion capacity of up to 25,000 metric tons LCE. It is capable of producing battery-grade lithium carbonate and lithium hydroxide. It is currently in the commissioning stage and expected to begin commercial production in the first half of the next year.

Albemarle stated that the acquisition of Tianyuan, which owns and operates a newly- constructed lithium processing plant, is in sync with its strategy to pursue profitable growth, in line with customer demand. This will be an important component of its next wave of projects that will boost its conversion capacity in a capital-efficient manner in the coming years.

With the rapid global transition to cleaner energy, this added lithium capacity will enable it to help the customers achieve their growth and sustainability ambitions, the company noted.

Shares of Albemarle have surged 131% in the past year compared with a 18.2% rise of the industry.

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Zacks Investment Research

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Albemarle, in its last earnings call, stated that it expects its performance for full-year 2021 to improve modestly on a year-over-year basis on a sustained recovery in global economic activities.

The company expects net sales for 2021 to be between $3.2 billion and $3.3 billion. It sees higher Lithium sales and improving trends in Catalysts. However, expectations for the Bromine business are reduced due to an increase in raw material costs and supply chain disruptions.

Moreover, Albemarle now expects adjusted earnings per share for 2021 in the band of $3.35-$3.70, up from its prior view of $3.25-$3.65.

Albemarle Corporation Price and Consensus

Albemarle Corporation Price and Consensus
Albemarle Corporation Price and Consensus

Albemarle Corporation price-consensus-chart | Albemarle Corporation Quote

Zacks Rank & Key Picks

Albemarle currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Nucor Corporation NUE, The Chemours Company CC and Methanex Corporation MEOH.

Nucor has a projected earnings growth rate of around 534.4% for the current year. The company’s shares have surged 106.5% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chemours has an expected earnings growth rate of around 86.4% for the current year. The company’s shares have gained 34.3% in the past year. It currently carries a Zacks Rank #2 (Buy).

Methanex has an expected earnings growth rate of around 409.3% for the current fiscal. The company’s shares have surged 93.3% in the past year. It currently flaunts a Zacks Rank #1.


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