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Celanese Closes Buyout of Nilit's Nylon Compounding Unit

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Chemical maker, Celanese (CE - Free Report) has closed its acquisition of the nylon compounding division of Nilit – Nilit Plastics – for an undisclosed price. The deal was announced in Feb 2017.

Nilit is a leading producer of high performance nylon polymers, fibers and compounds. In addition to Nilit Plastics’ nylon compounding product portfolio, the acquisition also includes customer agreements and manufacturing, technology and commercial facilities in Germany and China.

However, Nilit will retain possession of the nylon fibers and nylon polymerization businesses gloablly, including facilities in Israel, the U.S., China and Brazil.

The acquisition is in sync with Celanese’s plans to become a leading, global nylon compound supplier. The buyout will help Celanese to extend its global leadership position in the engineered materials business as nylon continues to be adopted in automotive, E&E, consumer and industrial applications.

Celanese plans to integrate Nilit Plastics’ nylon compounding product portfolio and production capabilities into its engineered materials business to include Nilit materials made under the Frianyl, Nilamid and Ecomid brand names.

Celanese has outperformed the Zacks categorized Chemicals-Diversified industry over a year, partly attributable to its strategic measures including productivity and efficiency improvement actions. The company’s shares have gained around 23.8% over this period, compared with roughly 20.9% gain recorded by the industry.


Celanese kept its earnings streak alive with a beat in first-quarter 2017. Its adjusted earnings per share of $1.81 topped the Zacks Consensus Estimate of $1.71. Sales of $1,471 million also came ahead of the Zacks Consensus Estimate of $1,456 million.

Celanese sees adjusted earnings per share to increase 8–11% in 2017. Its Advanced Engineered Materials unit is expected to continue to grow offsetting the decline in tow earnings. The company's Acetyl Chain unit is also anticipated to benefit from a volatile raw materials backdrop and the current industry environment is expected to improve profits as the year progresses.

Celanese is a Zacks Rank #3 (Hold) stock.

Celanese Corporation Price and Consensus

 

Celanese Corporation Price and Consensus | Celanese Corporation Quote

Stocks to Consider

Better-placed companies in the basic materials space include Huntsman Corporation (HUN - Free Report) , The Chemours Company (CC - Free Report) and Kronos Worldwide Inc (KRO - 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.

Huntsman has expected long-term growth of 7.8%.

Chemours has expected long-term growth of 15.5%.

Kronos has expected long-term growth of 5%.

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