Huntsman (HUN) Completes Buyout of CVC Thermoset Specialties
Huntsman Corporation HUN completed the acquisition of CVC Thermoset Specialties from Emerald Performance Materials LLC. Notably, the deal was valued at around $300 million, subject to customary closing adjustments. Huntsman funded the all-cash transaction from available liquidity.
CVC Thermoset Specialties is a North American specialty chemical producer that serves the industrial composites, adhesives and coatings markets. It has annual revenues of roughly $115 million, with two production facilities located in Akron, OH, and Maple Shade, NJ.
Per Huntsman’s management, the acquisition is in sync with its strategy of expanding its specialty Advanced Materials portfolio. Moreover, the buyout will offer the company products and technologies that it plans to expand and globalize by using its existing asset footprint and routes to market in Asia and Europe.
The acquisition is expected to offer unique technology, cost efficiency, an enlarged customer base, and greater value to shareholders. Also, Huntsman anticipates the acquisition to deliver roughly $15 million of annualized synergies within two years.
Huntsman's shares have lost 14.3% in the past year compared with the industry’s 27.5% decline.
The company recorded adjusted earnings per share of 29 cents in the first quarter, down from 36 cents in the year-ago quarter. The figure surpassed the Zacks Consensus Estimate of 19 cents.
Revenues fell roughly 5% year over year to $1,593 million. However, the top line surpassed the Zacks Consensus Estimate of $1,536.3 million.
On the first-quarter earnings call, Huntsman stated that it remains focused on protecting its balance sheet amid the global economic crisis. The company has reduced unnecessary inventories and is also trimming capital spending this year by 30% or around $90 million by delaying discretionary spending. Huntsman has also taken other actions, including cost reductions and suspension of share repurchases. It will also accelerate plans to realize synergies with its recent and pending strategic acquisitions.
Huntsman Corporation Price and Consensus
Huntsman Corporation price-consensus-chart | Huntsman Corporation Quote
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies in the basic materials space are Equinox Gold Corp. EQX, Newmont Corporation NEM and Barrick Gold Corporation GOLD.
Equinox Gold currently sports a Zacks Rank #1 (Strong Buy) and has a projected earnings growth rate of 231% for 2020. The company’s shares have gained 43% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Newmont has a projected earnings growth rate of 85.6% for the current year. The company’s shares have rallied around 113% in a year. It currently has a Zacks Rank #2 (Buy).
Barrick has a projected earnings growth rate of 64.7% for 2020. It currently carries a Zacks Rank #2. The company’s shares have rallied 122.9% in a year.
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