Ashland Global Holdings Inc. (ASH - Free Report) recently announced that its fully-owned subsidiary, Ashland LLC, has signed a definitive deal to sell its performance adhesives business to Arkema. The all-cash transaction is valued at roughly $1.65 billion or 20 times LTM EBITDA, and is expected to close by the end of calendar year 2021, subject to regulatory approvals and customary closing conditions.
Citi is acting as financial advisor while Cravath, Swaine & Moore LLP and Squire Patton Boggs LLP are acting as legal advisors to Ashland.
Ashland expects net proceeds from the sale in the range of $1.2 billion to $1.3 billion. The company plans to reinvest the proceeds to enhance its core businesses and optimize its balance sheet.
The agreement is in sync with the company’s strategy to direct resources for expanding its additive and ingredients portfolio and aligning it with long-term environment, social and governance drivers and high-quality consumer markets.
Ashland seeks to expand its position as a leader in the additive and ingredients domain and maintain capital allocation discipline while focusing on improving cash flow and margins.
It noted that performance adhesives is a high-quality business, demonstrating consistently strong financial performance over the years. The company believes that Arkema will create further value for employees and customers.
Shares of Ashland have grown 19% in a year compared to the industry’s rise of 19.6%. The estimated earnings growth rate for the company for the current fiscal year is 67.9%.
In the fiscal third quarter, the company’s adjusted earnings per share were $1.22, which missed the Zacks Consensus Estimate of $1.27. Its revenues were $637 million, increasing 11% year over year. The top line beat the Zacks Consensus Estimate of $635.9 million.
In its fiscal third-quarter earnings call, Ashland said that it is working to leverage the ongoing strong demand to satisfy the incremental demand of the consumers. The company also reaffirmed its expectations for full-year results.
Zacks Ranks & Stocks to Consider
Currently, Ashland has a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include AdvanSix Inc. (ASIX - Free Report) and Hawkins, Inc. (HWKN - Free Report) , each flaunting a Zacks Rank #1 (Strong Buy) and Atotech Limited , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AdvanSix has a projected earnings growth rate of 160.4% for the current year. The company’s shares have appreciated 172.4% in a year.
Hawkins has a projected earnings growth rate of 24.9% for the current year. The company’s shares have risen 52.9% in a year.
Atotech has a projected earnings growth rate of roughly 122% for the current year. The company’s shares have rallied 24.4% in a year.
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Ashland Global Holdings Inc. (ASH - Free Report) recently announced that its fully-owned subsidiary, Ashland LLC, has signed a definitive deal to sell its performance adhesives business to Arkema. The all-cash transaction is valued at roughly $1.65 billion or 20 times LTM EBITDA, and is expected to close by the end of calendar year 2021, subject to regulatory approvals and customary closing conditions.
Citi is acting as financial advisor while Cravath, Swaine & Moore LLP and Squire Patton Boggs LLP are acting as legal advisors to Ashland.
Ashland expects net proceeds from the sale in the range of $1.2 billion to $1.3 billion. The company plans to reinvest the proceeds to enhance its core businesses and optimize its balance sheet.
The agreement is in sync with the company’s strategy to direct resources for expanding its additive and ingredients portfolio and aligning it with long-term environment, social and governance drivers and high-quality consumer markets.
Ashland seeks to expand its position as a leader in the additive and ingredients domain and maintain capital allocation discipline while focusing on improving cash flow and margins.
It noted that performance adhesives is a high-quality business, demonstrating consistently strong financial performance over the years. The company believes that Arkema will create further value for employees and customers.
Shares of Ashland have grown 19% in a year compared to the industry’s rise of 19.6%. The estimated earnings growth rate for the company for the current fiscal year is 67.9%.
In the fiscal third quarter, the company’s adjusted earnings per share were $1.22, which missed the Zacks Consensus Estimate of $1.27. Its revenues were $637 million, increasing 11% year over year. The top line beat the Zacks Consensus Estimate of $635.9 million.
In its fiscal third-quarter earnings call, Ashland said that it is working to leverage the ongoing strong demand to satisfy the incremental demand of the consumers. The company also reaffirmed its expectations for full-year results.
Zacks Ranks & Stocks to Consider
Currently, Ashland has a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include AdvanSix Inc. (ASIX - Free Report) and Hawkins, Inc. (HWKN - Free Report) , each flaunting a Zacks Rank #1 (Strong Buy) and Atotech Limited , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AdvanSix has a projected earnings growth rate of 160.4% for the current year. The company’s shares have appreciated 172.4% in a year.
Hawkins has a projected earnings growth rate of 24.9% for the current year. The company’s shares have risen 52.9% in a year.
Atotech has a projected earnings growth rate of roughly 122% for the current year. The company’s shares have rallied 24.4% in a year.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
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