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Huntsman (HUN) Wraps Up Gabriel Performance Acquisition

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Huntsman Corporation (HUN - Free Report) recently announced the completion of the purchase of Gabriel Performance Products from funds owned by Audax Private Equity. Gabriel is a North America-based specialty chemical manufacturer of specialty additives and epoxy curing agents for the coatings, adhesives, sealants as well as composite end-markets.

It was an all-cash transaction wherein Huntsman paid $250 million that was funded from available liquidity, subject to customary closing adjustments.

Gabriel has three manufacturing facilities in Ashtabula, OH, Harrison City, PA and Rock Hill, SC. The company’s revenues for 2019 were roughly $106 million. Based on 2019, the acquisition price reflects an adjusted EBITDA multiple of around 11 times or roughly eight times pro forma for synergies.

The acquisition of Gabriel is expected to complement Huntsman’s recent acquisition of CVC Thermoset Specialties. It is also expected to provide significant commercial synergies as the company expands and globalizes its specialty products portfolio.

Shares of Huntsman have increased 23.4% in the past year compared with 21.8% rise of its industry.

The company expects fourth-quarter adjusted EBITDA for its Polyurethanes and Performance Products segments to be better than third-quarter levels.

In its Performance Products segment, the fourth-quarter adjusted EBITDA is expected to be higher than third-quarter figures by around 15%. In the Advanced material segment, it is projected to be in-line with third-quarter levels. In the Textile Effects segment, the same is projected to be roughly in line with fourth-quarter 2019 levels.

Huntsman is on track with integrating two downstream acquisitions completed last year and generating more than $100 million of targeted annualized savings from its cost-optimization initiative by the end of this year. The company is also focused on growth of its differentiated businesses and enhancing shareholders’ value.


Zacks Rank & Other Key Picks

Huntsman currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the basic materials space are Fortescue Metals Group Limited (FSUGY - Free Report) , BHP Group (BHP - Free Report) and Impala Platinum Holdings Limited (IMPUY - Free Report) .

Fortescue has a projected earnings growth rate of 75.5% for the current fiscal. The company’s shares have surged around 132.6% in a year. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

BHP has an expected earnings growth rate of 59.5% for the current fiscal. The company’s shares have gained around 28.5% in the past year. It currently flaunts a Zacks Rank #1.

Impala has an expected earnings growth rate of 189.4% for the current fiscal. The company’s shares have rallied around 43.7% in the past year. It currently sports a Zacks Rank #1.

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