Specialty chemicals maker American Vanguard’s (AVD - Free Report) fully-owned unit Amvac Chemical Corporation and its affiliates have entered into an amended and restated credit facility which will offer support to the global growth of its businesses.
The expanded bank credit facility has a five-year term and consists of a $200 million revolving credit line and a $100 million accordion feature (an option that gives the borrower rights to increase the credit line). It replaces the earlier credit facility that consisted of $62 million term commitments, $75 million revolving credit line and an accordion feature of $50 million.
In addition, the new facility includes borrowing capacity of $50 million to American Vanguard’s Dutch subsidiaries and allows the buyback of its common stock in amounts of up to $20 million annually or $50 million in total over the five-year term. The facility also offers increased flexibility in capital spending, enhanced capacity to make strategic investments and reduced overall borrowing rates. The lenders for the new facility are led by Bank of the West.
The new facility provides American Vanguard with greater flexibility and will help it to grow its crop protection and pest control franchises by allowing it to acquire additional products, develop new technologies and expand internationally.
American Vanguard makes specialty chemical products for agricultural and commercial applications. The company develops and markets an array of chemicals, including insecticides, fungicides and herbicides, for crops, human and animal health protection. American Vanguard has the largest assortment of corn soil insecticides coupled with the most advanced dispensing equipment.
American Vanguard’s first-quarter 2013 profit nearly doubled on the back of strong market demand for its corn herbicide and insecticide products. It posted a profit of $16.9 million in the reported quarter, a 94% surge from a profit of $8.7 million recorded a year ago.
Revenues shot up 39% year over year to $121.5 million in the reported quarter, buoyed by strong adoption of American Vanguard’s granular soil insecticides and Impact herbicide in the domestic corn market.
American Vanguard is optimistic about 2013 and feels that it is well placed to meet the increasing demand for soil insecticides by maintaining full production of its products and proprietary equipment systems.
American Vanguard currently carries a Zacks Rank #1 (Strong Buy).
Other companies in the specialty chemicals industry with favorable Zacks Rank are OM Group Inc. , Ferro Corp. (FOE - Free Report) and Minerals Technologies Inc. (MTX - Free Report) . While OM Group holds a Zacks Rank #1 (Strong Buy), both Ferro and Minerals Technologies retain a Zacks Rank #2 (Buy).