Univar (UNVR) Closes Sale of Environmental Sciences Business
Univar Solutions Inc. UNVR has completed the sale of its Environmental Sciences business to affiliates of AEA Investors LP for $195 million. The company announced the deal in December 2019.
Univar will use the net proceeds from the deal to pay down existing debt, per its previously stated plan.
With the completion of the transaction, Univar will now focus more on its core chemical and ingredient distribution businesses.
Notably, the company, in December 2019, noted that the divestiture will be a 'win-win' for Environmental Sciences’ dedicated employees, supplier partners and loyal customers. Also, the transaction’s total economic benefit is expected to be enhanced by cost avoidance opportunities.
The Environmental Sciences business is a leading pest management business based in Austin, TX. The business serves the expanding pest control market with unmatched products and services as well as educational and technology resources.
In connection with the deal, Piper Jaffray & Co. and Stinson LLP acted as the financial advisor and legal counselor, respectively, for Univar.
Univar’s shares have gained 22% over a year against a 22.3% decline recorded by its industry.
In November 2019, the company revised the adjusted EBITDA forecast for 2019, factoring in the lower-than-expected demand for chemicals and ingredients. Further, Univar expects adjusted EBITDA of $700-$725 million for the year compared with $725-$740 million mentioned earlier.
Moreover, the company expects adjusted EBITDA of $155-$180 million for the fourth quarter of 2019, suggesting rise from $144 million reported in the year-ago quarter.
Univar Inc. Price and Consensus
Univar Inc. price-consensus-chart | Univar Inc. Quote
Zacks Rank & Stocks to Consider
Univar currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Daqo New Energy Corp. DQ, Pan American Silver Corp. PAAS and Sibanye Gold Limited SBGL.
Daqo New Energy has projected earnings growth rate of 294.7% for 2020. The company’s shares have rallied 106.7% in a year. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Pan American Silver has an estimated earnings growth rate of 38.1% for 2020. It currently flaunts a Zacks Rank #1. The company’s shares have gained 53.1% in a year.
Sibanye Gold has a projected earnings growth rate of 587.5% for 2020 and a Zacks Rank #2 (Buy) at present. The company’s shares have soared 242.9% in a year.
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