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Univar (UNVR) & Novozymes Tie-Up for Bio Solutions for Wastewater

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Univar Solutions Inc. (UNVR - Free Report) recently announced an agreement with Novozymes, the leading player in biological solutions, which seeks to expand its footprint to include biological solutions for waste and wastewater treatment in the United States and Canada. The agreement follows previous announcements broadening the partnership to include a range of markets in the United States, Canada, and Latin America.

This agreement fortifies Univar’s services to municipal and industrial wastewater treatment plants, providing bio-augmentation, biogas, and sludge management enzymatic and microbial treatment solutions. Novozymes' advanced biotechnology provides biological solutions to traditional water and waste-treatment challenges such as sludge management, degradation of re-calcitration compounds, and biogas generation.

Univar is enthusiastic about the partnership. The addition of Novozymes' specialty biologic solutions to its portfolio strengthens its offerings to customers with complex water treatment requirements. The collaboration broadens Univar’s sustainable wastewater treatment capability that can be leveraged for gains.

Novozymes noted that the partnership will broaden its reach within the water industry through Univar’s panel of industry experts. With the advent of biology and biotechnology in industrial landscapes, which promise for the next industrial revolution, this partnership initiates a transition toward more sustainable, biological solutions in the water and waste industries.

Shares of Univar have appreciated 31% in a year compared with the industry’s rise of 20.7%. The estimated earnings growth rate for the company for the current year is 42.4%.

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The company expects adjusted EBITDA for third-quarter 2021 to be in the range of $175-$185 million and adjusted EBITDA in a band of $705-$725 million, implying an increase from $635.8 million reported in 2020. The forecast for net free cash flow for the year has been reiterated in the band of $280-$300 million.

Under the S22 Program, the company is focused on improving adjusted EBITDA margins to 9% by the end of 2022 and expects to reduce leverage to 2.7x or lower by the end of 2021. It also forecasts 2021 year-end liquidity to be more than $800 million, inclusive of $100 million of debt pay-down in the second half of the year. Univar expects more normalized margins and continued market share growth in the second half of 2021 as its aims for a more customer-centric approach.

Zacks Ranks & Stocks to Consider

Currently, Univar has a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include Avient Corporation (AVNT - Free Report) , Methanex Corporation (MEOH - Free Report) , and Olin Corporation (OLN - Free Report) , each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Avient has a projected earnings growth rate of 75.1% for the current year. The company’s shares have surged 82.7% in a year.

Methanex has a projected earnings growth rate of 422.8% for the current year. The company’s shares have rallied 84.5% in a year.

Olin has a projected earnings growth rate of roughly 639.3% for the current year. The company’s shares have grown 259.9% in a year.

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