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American Vanguard (AVD) Inks Crop Protection Assets Deal
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American Vanguard Corporation (AVD - Free Report) declared that its principal operating subsidiary, AMVAC Chemical Corporation has signed an agreement to acquire specific U.S. assets relating to the three crop protection product lines – Abamectin, Chlorothalonil and Paraquat – from subsidiaries of Adama Agricultural Solutions Ltd., part of China National Chemical Corporation (ChemChina) group. Financial terms of the deal remain undisclosed.
The assets which will be acquired include trademarks, product registrations, registration data, and commercial information that relate to the marketing and sale of these three products in the crop protection market within the U.S.
This deal is part of an agreement between the Federal Trade Commission (FTC), ChemChina and Syngenta AG, under which ChemChina is required to divest these assets for ChemChina’s planned acquisition of Syngenta.
American Vanguard’s shares declined around 7% in the past three months, underperforming the Zacks categorized Chemical-Specialty industry’s gain of 6%.
American Vanguard reported earnings per share of 13 cents for the fourth quarter of 2016, coming at par with the Zacks Consensus Estimate. The company generated revenues of $87.5 million in the reported quarter, missing the Zacks estimate of $89.1 million. However, the quarterly revenues were up 4.8% on a year-over-year basis.
American Vanguard provided a positive outlook for 2017 and expects business to grow in various areas. An anticipated 10% rise in cotton planted acres in the U.S. augurs well for the company’s foliar insecticide and harvest aid products.
However, the company is exposed to challenging industry conditions as low crop commodity prices continue to reduce crop inputs purchase, including crop protection products.
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American Vanguard (AVD) Inks Crop Protection Assets Deal
American Vanguard Corporation (AVD - Free Report) declared that its principal operating subsidiary, AMVAC Chemical Corporation has signed an agreement to acquire specific U.S. assets relating to the three crop protection product lines – Abamectin, Chlorothalonil and Paraquat – from subsidiaries of Adama Agricultural Solutions Ltd., part of China National Chemical Corporation (ChemChina) group. Financial terms of the deal remain undisclosed.
The assets which will be acquired include trademarks, product registrations, registration data, and commercial information that relate to the marketing and sale of these three products in the crop protection market within the U.S.
This deal is part of an agreement between the Federal Trade Commission (FTC), ChemChina and Syngenta AG, under which ChemChina is required to divest these assets for ChemChina’s planned acquisition of Syngenta.
American Vanguard’s shares declined around 7% in the past three months, underperforming the Zacks categorized Chemical-Specialty industry’s gain of 6%.
American Vanguard reported earnings per share of 13 cents for the fourth quarter of 2016, coming at par with the Zacks Consensus Estimate. The company generated revenues of $87.5 million in the reported quarter, missing the Zacks estimate of $89.1 million. However, the quarterly revenues were up 4.8% on a year-over-year basis.
American Vanguard provided a positive outlook for 2017 and expects business to grow in various areas. An anticipated 10% rise in cotton planted acres in the U.S. augurs well for the company’s foliar insecticide and harvest aid products.
However, the company is exposed to challenging industry conditions as low crop commodity prices continue to reduce crop inputs purchase, including crop protection products.
American Vanguard Corporation Price and Consensus
American Vanguard Corporation Price and Consensus | American Vanguard Corporation Quote
American Vanguard currently carries a Zacks Rank #4 (Sell).
Key Picks
Better-ranked companies in the chemical space include Versum Materials Inc. , Univar Inc. and The Chemours Company (CC - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Versum has expected long-term growth of 8%.
Univar has expected long-term growth of 9.4%.
Chemours has expected long-term growth of 15.5%.
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