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Milacron Divests Uniloy to Osgood & Cyprium Investment Firms

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Milacron Holdings Corp. MCRN has sold its Uniloy Blow Molding Business to Osgood Capital Group, LLC and Cyprium Investment Partners, LLC. The company has generated $51.9 million in proceeds, following the transaction’s conclusion on Jul 1. Nevertheless, Milacron will receive remaining balance of the purchase price upon closing of the sale of its Uniloy Blow Molding Business in India. Since 1998, Uniloy has operated under the Milacron product brand name.

On May 15, Milacron signed an agreement with Capital Group and Cyprium Partners to divest its Uniloy Blow Molding Business. This transaction is in line with Milacron’s focus on core industry-leading technologies, including Milacron extrusion equipment, Milacron injection molding machines, CIMCOOL fluid technologies, DME mold components, and Mold-Masters hot runner and control systems.
 
The new Uniloy business continues to provide technical expertise, high-performance machinery and aftermarket service to customers, while also fulfilling customer’s blow molding needs, under the latest ownership. Being a global leader in the blow molding industry, the Uniloy brand foresees stellar growth of Global Uniloy brands in the years ahead.

Osgood capital firm acquires unique companies and executes growth through innovation, strategy and investment. Cyprium Partners is a private equity firm and a provider of common equity, preferred stock and subordinated debt to middle-market businesses.

During March-end quarter, Milacron initiated a process to divest its blow-molding business as it is no longer considered a strategic fit with the company's long-term growth and operational objectives. The blow-molding business has historically been difficult to predict and has not met the projected profitability targets.
 
Moreover, Milacron’s exit from the blow-molding business is anticipated to help it achieve top-line growth of 5% and EBITDA margins of 20%.  Though the blow-molding business’ disposition is unlikely to impact the company’s results materially, it might lower its free cash flow by $10 million. Consequently, the company now projects free cash flow at $90-$100 million for 2019.
 
Milacron predicts sales to be down 3-4% this year, including an anticipated headwind of 1% from foreign-currency translation.

Milacron has been bearing the brunt of tariffs, and intends to mitigate the headwind by focusing on pricing actions, negotiations with existing vendors and making supply-chain modifications. Further, since 2014, Milacron has undergone a number of organizational redesign and cost-reduction initiatives to improve its cost structure and operating flexibility. Along with the restructuring, it will focus on enhancing operations, optimizing product mix, improving service to customers and augmenting the company’s financial performance.

Milacron Holdings Corp. Price and Consensus

Milacron Holdings Corp. Price and Consensus

Milacron Holdings Corp. price-consensus-chart | Milacron Holdings Corp. Quote

Zacks Rank & Stocks to Consider

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

A few better-ranked stocks in the Industrial Products sector are AptarGroup, Inc. ATR, Roper Technologies, Inc. ROP and CIRCOR International, Inc. CIR , each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

AptarGroup has an estimated earnings growth rate of 8.7% for the ongoing year. The company’s shares have gained 34% in the past year.

Roper Technologies has an expected earnings growth rate of 9.4% for the current year. The stock has appreciated 37.7% in a year’s time.

CIRCOR International has a projected earnings growth rate of 7.6% for 2019. The stock has rallied 21.8% over the past year.

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