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DOW to Sell Flexible Packaging Laminating Adhesives Business
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Dow Inc. (DOW - Free Report) recently stated that it has agreed to sell its flexible packaging laminating adhesives business, which is part of Dow's Packaging & Specialty Plastics unit, to Arkema, a specialty materials company.
This deal allows the company to focus even more on core, high-value downstream operations. The proceeds from this transaction will go toward Dow's capital allocation goals, which include advancing growth initiatives and creating long-term shareholder value.
Arkema will acquire five manufacturing facilities in Italy, the United States and Mexico, including the Solvent-Based Laminating Adhesives, Solventless Laminating Adhesives and Heat Seal Coatings product lines.
The transaction is worth $150 million, or around 10 times the EBITDA anticipated for 2024. The transaction is expected to close by the end of 2024, pending regulatory approval.
Dow will keep its water-based laminating adhesives and acrylic adhesives businesses in Packaging and Specialty Plastics, as well as adhesive solutions in Dow Consumer Solutions and MobilityScience, which are consistent with the company's market growth plans. Dow and Arkema are committed to providing a seamless transition for all stakeholders.
Shares of DOW have gained 8.8% over the past year against a 0.5% rise of its industry.
Image Source: Zacks Investment Research
On its first-quarter call, Dow said that demand in key end-use markets such as packaging, mobility and energy applications is trending higher sequentially, which is in sync with its expectations at the beginning of the year.
The company expects its high-value organic growth investments and advantaged portfolio to allow it to deliver earnings growth and increased shareholder value as the economic recovery gains strength. This provides DOW with the financial flexibility to advance its Decarbonize and Grow and Transform the Waste strategies, which are expected to deliver more than $3 billion in underlying earnings improvement annually by 2030.
Better-ranked stocks in the basic materials space include ATI Inc. (ATI - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Ecolab Inc. (ECL - Free Report) .
ATI carrying a Zacks Rank #1 (Strong Buy). ATI beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 8.3%. The company’s shares have soared 58.5% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology currently carries a Zacks Rank #1. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 15.1%. The company’s shares have soared 101.6%% in the past year.
The Zacks Consensus Estimate for Ecolab’s current-year earnings is pegged at $6.55 per share, indicating a year-over-year rise of 25.7%. ECL, a Zacks Rank #2 (Buy) stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 1.3%. The company’s shares have rallied roughly 34.8% in the past year.
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DOW to Sell Flexible Packaging Laminating Adhesives Business
Dow Inc. (DOW - Free Report) recently stated that it has agreed to sell its flexible packaging laminating adhesives business, which is part of Dow's Packaging & Specialty Plastics unit, to Arkema, a specialty materials company.
This deal allows the company to focus even more on core, high-value downstream operations. The proceeds from this transaction will go toward Dow's capital allocation goals, which include advancing growth initiatives and creating long-term shareholder value.
Arkema will acquire five manufacturing facilities in Italy, the United States and Mexico, including the Solvent-Based Laminating Adhesives, Solventless Laminating Adhesives and Heat Seal Coatings product lines.
The transaction is worth $150 million, or around 10 times the EBITDA anticipated for 2024. The transaction is expected to close by the end of 2024, pending regulatory approval.
Dow will keep its water-based laminating adhesives and acrylic adhesives businesses in Packaging and Specialty Plastics, as well as adhesive solutions in Dow Consumer Solutions and MobilityScience, which are consistent with the company's market growth plans. Dow and Arkema are committed to providing a seamless transition for all stakeholders.
Shares of DOW have gained 8.8% over the past year against a 0.5% rise of its industry.
Image Source: Zacks Investment Research
On its first-quarter call, Dow said that demand in key end-use markets such as packaging, mobility and energy applications is trending higher sequentially, which is in sync with its expectations at the beginning of the year.
The company expects its high-value organic growth investments and advantaged portfolio to allow it to deliver earnings growth and increased shareholder value as the economic recovery gains strength. This provides DOW with the financial flexibility to advance its Decarbonize and Grow and Transform the Waste strategies, which are expected to deliver more than $3 billion in underlying earnings improvement annually by 2030.
Dow Inc. Price and Consensus
Dow Inc. price-consensus-chart | Dow Inc. Quote
Zacks Rank & Key Picks
Dow currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include ATI Inc. (ATI - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Ecolab Inc. (ECL - Free Report) .
ATI carrying a Zacks Rank #1 (Strong Buy). ATI beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 8.3%. The company’s shares have soared 58.5% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology currently carries a Zacks Rank #1. CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 15.1%. The company’s shares have soared 101.6%% in the past year.
The Zacks Consensus Estimate for Ecolab’s current-year earnings is pegged at $6.55 per share, indicating a year-over-year rise of 25.7%. ECL, a Zacks Rank #2 (Buy) stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 1.3%. The company’s shares have rallied roughly 34.8% in the past year.