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HC2 Holdings (HCHC) to Divest Beyond6 to Mercuria Investments

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HC2 Holdings, Inc. (HCHC - Free Report) announced, on Dec 31, 2020, to have agreed to divest its clean energy subsidiary, Beyond6, Inc. The buyer to the transaction is Mercuria Investments US, Inc. and the divestment price has been fixed at $169 million.

It is worth noting here that shares of HC2 Holdings decreased 3.3% on Dec 31, 2020, ending the trading session at $3.26.

Mercuria is well-known globally as a trader in dry bulk commodities and physical energy products, including refined petroleum products, crude oil, environmental products, petrochemicals, iron ore, natural gas, coal and others. It operates in more than 50 countries.

Inside the Headlines

As noted, Beyond6 is a specialist in providing various energy solutions, mainly those related to decarbonization. It owns and operates multiple CNG stations for use by customers in the transportation industry as well as provides various decarbonization services.

HC2 Holdings owns a 61% stake in Beyond6. The company anticipates receiving cash of $65 million upon completion of the divestment. This amount, however, is subject to necessary closing adjustments.

The divestment has been approved by HC2 Holdings’ board of directors and will likely be completed in first-quarter 2021, after receipt of regulatory approvals and fulfillment of customary closing conditions.

The company noted that this divestment is in sync with its plans to strengthen its capital structure and growth opportunities. Proceeds will help strengthen financial flexibility and lowering debts.

Beyond6 comprises HC2 Holdings’ Clean Energy segment. Its revenues were $10.3 million in the third quarter and $31 million in the first nine months of 2020, representing increases from $8.7 million and $19.3 million, respectively, generated in the year-ago comparable period.

Zacks Rank, Earnings Estimate and Price Trend

HC2 Holdings presently carries a Zacks Rank #3 (Hold). It is poised to gain from efforts to strengthen the balance sheet, lower corporate expenses and enhance growth opportunities. However, the pandemic-related woes and competition are concerning. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past three months, the company’s shares have gained 24.9% compared with the industry’s growth of 18.7%.




 

The Zacks Consensus Estimate for the company’s bottom line is pegged at a loss of 20 cents per share for the fourth quarter of 2020 and a loss of $2.08 for 2021. Notably, the 60-day-ago consensus estimate was pegged at a loss of 30 cents for the fourth quarter and a loss of $2.16 for 2021.  

Three other companies (from the same industry) that divested assets in the past few quarters are Danaher Corporation DHR, 3M Company (MMM - Free Report) and General Electric Company (GE - Free Report) .

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3M Company (MMM) - free report >>

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HC2 Holdings, Inc. (HCHC) - free report >>

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