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Huntsman (HUN) Set to Acquire Gabriel Performance Products

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Zacks Equity Research
·3 min read
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Huntsman Corporation HUN announced that it has agreed to acquire Gabriel Performance Products, a North American specialty chemical manufacturer of specialty additives and epoxy curing agents for the coatings, adhesives, sealants and composite end-markets, from funds owned by Audax Private Equity.

Per the terms of the agreement, Huntsman will pay $250 million in an all cash transaction funded from available liquidity, subject to customary closing adjustments.

Gabriel’s revenues of 2019 were roughly $106 million with three manufacturing facilities located in Ashtabula, OH, Harrison City, PA and Rock Hill, SC. The purchase price represents an adjusted EBITDA multiple of around 11 times, or roughly eight times pro forma for synergies, based on 2019.

Acquisition of Gabriel will complement Huntsman’s recent acquisition of CVC Thermoset Specialties. It is also expected to provide significant commercial synergies as the company expands and globalizes its specialty products portfolio.

The transaction is expected to be completed in first-quarter 2021 post regulatory approvals.

Shares of Huntsman have increased 8.2% over a year compared with 11% rise of its industry.

Huntsman is witnessing positive momentum entering the fourth quarter. It is on track to integrate two downstream acquisitions completed earlier this year and delivering more than $100 million of targeted annualized savings from its cost optimization initiative by the end of next year. The company is also focused on growth of its differentiated businesses and enhancing shareholders’ value.

Huntsman Corporation Price and Consensus

 

Huntsman Corporation Price and Consensus
Huntsman Corporation Price and Consensus

Huntsman Corporation price-consensus-chart | Huntsman Corporation Quote

 

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks worth considering in the basic materials space are Bunge Limited BG, Silvercorp Metals Inc. SVM, and First Majestic Silver Corp. AG.

Bunge has a projected earnings growth rate of 43% for the current year. The company’s shares have gained around 14% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Silvercorp has an expected earnings growth rate of 40% for the current year. The company’s shares are up around 16.6% in the past year. It currently carries a Zacks Rank #2 (Buy).

First Majestic has an expected earnings growth rate of 75% for the current year. The company’s shares have gained around 9.4% in the past year. It currently carries a Zacks Rank #2.

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Huntsman Corporation (HUN) : Free Stock Analysis Report
 
Bunge Limited (BG) : Free Stock Analysis Report
 
First Majestic Silver Corp. (AG) : Free Stock Analysis Report
 
Silvercorp Metals Inc. (SVM) : Free Stock Analysis Report
 
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