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Univar Solutions Inc. recently acquired Sweetmix Distribuidora de Materias Primas Industriais Ltda, one of the top five Brazilian distributors of ingredients and specialty chemicals. Sweetmix brings together both new suppliers and agreements with existing Univar suppliers as well as new customers, and works to enhance the company's specialty food ingredients offering in Latin America. It also boosts Univar’s position in the local coatings, adhesives, sealants and elastomers market. The terms of the deal were not disclosed.
The acquisition is expected to be a growth driver for Univar’s Food Ingredients distribution space in Brazil, enhance value creation through a versatile range of ingredients and deliver growth and cost synergies and margin improvement. The company is also optimistic about Sweetmix providing increased scale and acting as a springboard for its expansion in Latin America with the other recently announced partnerships, including Novozymes and AGT.
Sweetmix is equally enthusiastic about the tie-up and hopes that Univar's scale, digital infrastructure, world-class technical network and strong supplier relationships will enable it to provide customers with differentiated, high-quality products backed by specialized, technical service.
Univar shares have jumped 47.9% over the past year compared with the industry’s 12.2% rise. The company’s estimated earnings growth rate for the current year is pegged at 55.2%.
Image Source: Zacks Investment Research
The company, on its third-quarter call, stated that it expects adjusted EBITDA for fourth-quarter 2021 to be in the range of $180-$190 million. It also raised its guidance for adjusted EBITDA to the band of $770-$780 million from the previously expected range of $705-$725 million for 2021. Its adjusted EBITDA was $635.8 million in 2020. Forecast for net free cash flow for the year has been lowered to the band of $200-$210 million from the previously expected $280-$300 million.
Univar expects continued strong business conditions in the fourth quarter, which has two and a half less billing days than the third quarter. Its guidance has taken this into consideration. The company is optimistic about its prospects for full-year 2021 as it has made great strides in its strategic priorities.
Moreover, its board has approved a share repurchase program authorizing it to buy back up to $500 million of its outstanding common stock over the next five years. It also forecasts continued strong liquidity and the majority of its debt obligations to mature in 2026 and beyond.
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 2.6x or lower by the end of 2021. Additionally, it expects to achieve the targeted $120 million in annual net synergies from the Nexeo acquisition by early 2022.
AdvanSix has an expected earnings growth rate of 197% for the current year. The Zacks Consensus Estimate for the current year has been revised 14.1% upward over the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in all the four trailing quarters with an earnings surprise of 47%, on average. ASIX’s shares have also surged 118.3% over a year.
Chemours has an expected earnings growth rate of 105.1% for the current year. The Zacks Consensus Estimate for the current year has been revised 10% upward over the past 60 days.
Chemours beat the Zacks Consensus Estimate for earnings in all the four trailing quarters with an earnings surprise of 34.24%, on average. CC’s shares have risen 14.3% over a year.
Celanese has an expected earnings growth rate of 139.7% for the current year. The Zacks Consensus Estimate for the current year has been revised 9.1% upward over the past 60 days.
Celanese beat the Zacks Consensus Estimate for earnings in all of the four trailing quarters and pulled off an earnings surprise of 12.7%, on average. Shares of CE have rallied around 21.1% over a year.
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Univar (UNVR) Buys Sweetmix, Boosts Food Ingredients Portfolio
Univar Solutions Inc. recently acquired Sweetmix Distribuidora de Materias Primas Industriais Ltda, one of the top five Brazilian distributors of ingredients and specialty chemicals. Sweetmix brings together both new suppliers and agreements with existing Univar suppliers as well as new customers, and works to enhance the company's specialty food ingredients offering in Latin America. It also boosts Univar’s position in the local coatings, adhesives, sealants and elastomers market. The terms of the deal were not disclosed.
The acquisition is expected to be a growth driver for Univar’s Food Ingredients distribution space in Brazil, enhance value creation through a versatile range of ingredients and deliver growth and cost synergies and margin improvement. The company is also optimistic about Sweetmix providing increased scale and acting as a springboard for its expansion in Latin America with the other recently announced partnerships, including Novozymes and AGT.
Sweetmix is equally enthusiastic about the tie-up and hopes that Univar's scale, digital infrastructure, world-class technical network and strong supplier relationships will enable it to provide customers with differentiated, high-quality products backed by specialized, technical service.
Univar shares have jumped 47.9% over the past year compared with the industry’s 12.2% rise. The company’s estimated earnings growth rate for the current year is pegged at 55.2%.
The company, on its third-quarter call, stated that it expects adjusted EBITDA for fourth-quarter 2021 to be in the range of $180-$190 million. It also raised its guidance for adjusted EBITDA to the band of $770-$780 million from the previously expected range of $705-$725 million for 2021. Its adjusted EBITDA was $635.8 million in 2020. Forecast for net free cash flow for the year has been lowered to the band of $200-$210 million from the previously expected $280-$300 million.
Univar expects continued strong business conditions in the fourth quarter, which has two and a half less billing days than the third quarter. Its guidance has taken this into consideration. The company is optimistic about its prospects for full-year 2021 as it has made great strides in its strategic priorities.
Moreover, its board has approved a share repurchase program authorizing it to buy back up to $500 million of its outstanding common stock over the next five years. It also forecasts continued strong liquidity and the majority of its debt obligations to mature in 2026 and beyond.
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 2.6x or lower by the end of 2021. Additionally, it expects to achieve the targeted $120 million in annual net synergies from the Nexeo acquisition by early 2022.
Univar Solutions Inc. Price and Consensus
Univar Solutions Inc. price-consensus-chart | Univar Solutions Inc. Quote
Zacks Rank & Other Key Picks
Univar currently carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks from the basic materials space include AdvanSix Inc. (ASIX - Free Report) , sporting a Zacks Rank #1, and The Chemours Company (CC - Free Report) and Celanese Corporation (CE - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AdvanSix has an expected earnings growth rate of 197% for the current year. The Zacks Consensus Estimate for the current year has been revised 14.1% upward over the past 60 days.
AdvanSix beat the Zacks Consensus Estimate for earnings in all the four trailing quarters with an earnings surprise of 47%, on average. ASIX’s shares have also surged 118.3% over a year.
Chemours has an expected earnings growth rate of 105.1% for the current year. The Zacks Consensus Estimate for the current year has been revised 10% upward over the past 60 days.
Chemours beat the Zacks Consensus Estimate for earnings in all the four trailing quarters with an earnings surprise of 34.24%, on average. CC’s shares have risen 14.3% over a year.
Celanese has an expected earnings growth rate of 139.7% for the current year. The Zacks Consensus Estimate for the current year has been revised 9.1% upward over the past 60 days.
Celanese beat the Zacks Consensus Estimate for earnings in all of the four trailing quarters and pulled off an earnings surprise of 12.7%, on average. Shares of CE have rallied around 21.1% over a year.