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Albemarle to Sell Portion of Performance Catalysts Unit

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Albemarle Corporation ALB entered into a definitive agreement to divest its polyolefin catalysts and components business to W.R. Grace & Co. in a cash deal valued at roughly $416 million. The deal, which is subject to regulatory approvals and other customary closing conditions, is expected to close during the first quarter of 2018.

Per the terms of the deal, the curatives and organometallics portions of the Performance Catalysts Solutions business will remain with Albemarle. Grace will assume the operations and lease at the Product Development Center in Baton Rouge, LA, and operations at the Yeosu site in South Korea.

Per Albemarle, this move demonstrates its continued commitment toward portfolio management in the best interest of shareholders and employees. Grace is well-placed to drive the polyolefin catalysts and components business toward success, the company added.

Shares of Albemarle have rallied 18.1% in the past six months, outperforming the industry’s 13.9% growth.


In November, Albemarle raised its guidance for 2017 and the company now expects full-year net sales of between $3 billion and $3.05 billion (compared with the prior view of $2.90-$3.05 billion), adjusted earnings per share between $4.40 and $4.50 (compared with the prior view of $4.20 and $4.40) and adjusted EBITDA of $860-$875 million (compared with $835-$875 million expected earlier).

Albemarle remains focused on strengthening its lithium business. The company is well placed to leverage strong expected growth in the battery-grade lithium market. Albemarle is executing a number of projects that are likely to boost its global lithium derivative capacity to 165,000 metric tons by 2021.

Additionally, Albemarle’s strategy to sell non-core businesses and assets is likely to boost its growth opportunities and focus on its key businesses.

Zacks Rank & Other Stocks to Consider

Albemarle currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are Westlake Chemical Corporation (WLK - Free Report) , Daqo New Energy Corp. DQ and Kronos Worldwide Inc. KRO, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Westlake Chemical has an expected long-term earnings growth rate of 10.6%. Its shares have moved up 80.3% year to date.

Daqo New Energy has an expected long-term earnings growth rate of 7%. Its shares have surged a whopping 142.7% year to date.

Kronos Worldwide has an expected long-term earnings growth rate of 5%. Its shares have rallied 109.6% year to date.

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