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Univar (UNVR) to Distribute BASF's Lupragen in the U.S.

Zacks Equity Research

Univar Inc. UNVR recently announced that it has been selected as BASF's exclusive authorized distributor for Lupragen amine catalysts in the United States.

Univar is a pioneer in chemicals and raw materials for coatings, adhesives, sealants and elastomers (CASE) applications, which positions the company to represent these specialty products in the polyurethane markets.

Per Univar, the broad line of catalysts fits well with its complimentary product mix in the polyurethane space. The company’s strong distribution network and technical capabilities will enable it to leverage these products to deliver the right solutions to their mutual customers.

Notably, BASF has more than 15 polyurethane amine catalysts in its product portfolio. It markets high-performance reaction accelerators under the brand, Lupragen. This includes extremely low-emission polyurethane catalysts. They are used to facilitate the reaction of the main components' polyol and isocyanate.

Univar’s shares have tumbled 30.4% in the past year compared with the 42.4% decline recorded by the industry.



In August, the company revised its adjusted EBITDA forecast considering lower-than-expected demand for chemicals and ingredients, higher-than-expected net cost synergies from Nexeo as well as outlook from many supplier partners. It now expects adjusted EBITDA between $725 million and $740 million compared with the previous view of $740 million and $760 million.

Univar is progressing well with the integration of Nexeo's chemical distribution customers, suppliers and support functions. The company now sees higher cost-saving synergies from Nexeo than what it had originally anticipated. It has raised guidance for annual net synergy from $100 million to $120 million (before tax). Univar expects to achieve $20 million in net synergies this year, higher than the initial expectations of $10 million.

Zacks Rank & Key Picks

Univar currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the basic materials space are Kinross Gold Corporation KGC, Alamos Gold Inc. AGI and Arconic Inc. ARNC, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross has an expected earnings growth rate of 160% for 2019. The company’s shares have surged 65.7% in the past year.

Alamos Gold has projected earnings growth rate of 320% for the current year. The company’s shares have rallied 60.6% in a year’s time.

Arconic has an estimated earnings growth rate of 50% for the current year. Its shares have moved up 15.4% in the past year.

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Univar Inc. (UNVR) : Free Stock Analysis Report
 
Kinross Gold Corporation (KGC) : Free Stock Analysis Report
 
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