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Univar Solutions (UNVR) Announces Pricing of Senior Notes

Zacks Equity Research

Univar Solutions Inc.’s UNVR fully-owned subsidiary — Univar Solutions USA Inc. — has priced an offering of $500 million in total principal amount of 5.125% senior notes due 2027 through a private offering. This marks an increase of $100 million from the earlier announced amount of the offering.

Univar Solutions plans to use the additional proceeds to repay part of its existing secured debt. The company expects the sale of the notes to be completed on or about Nov 22, 2019, which is subject to customary closing conditions.

Moreover, the notes will be treated as senior unsecured obligations of Univar Solutions USA. It will be guaranteed by Univar Solutions along with certain of its domestic subsidiaries.

The company plans to use the net proceeds from the proposed offering along with cash in hand and the proceeds of the borrowing under a new USD term loan B facility. The company will redeem all the outstanding total principal amount of Univar Solutions USA's 6.75% senior notes due 2023. As of Nov 15, the outstanding total principal amount of the existing notes was $400 million.

Univar Solutions is also expected to repay all the outstanding total principal amount of the existing Euro term B-2 loan facility as well as pay any associated expenses and fees related to the foregoing. As of Nov 15, the outstanding total principal amount of the existing EUR Term Loan is Eur 350 million.

Notably, Univar Solutions’ long-term debt rose 17% year over year to $2,977.1 million at the end of the third quarter. The company ended the third quarter with cash and cash equivalents of $134.6 million, up around 57% year over year.

Univar Solutions’ shares have gained 3.4% in the past year against 22.1% decline recorded by the industry.

Zacks Rank & Stocks to Consider

Univar Solutions currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Kirkland Lake Gold Ltd KL, Franco-Nevada Corporation FNV and Agnico Eagle Mines Limited AEM, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kirkland Lake Gold has an expected earnings growth rate of 96.3% for the current year. The company’s shares have surged 150.7% in the past year.

Franco-Nevada has projected earnings growth rate of 46.2% for 2019. The company’s shares have rallied 40.5% in a year.

Agnico Eagle has an estimated earnings growth rate of 168.6% for the current year. Its shares have moved up 61.4% in the past year.

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