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Valvoline (VVV) to Buy Assets of Oil Changers in Canada

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Valvoline Inc. (VVV - Free Report) recently announced that it has entered into an agreement to purchase the business assets of Oil Changers Inc. Notably, the deal marks the company’s second quick-lube acquisition in Canada, which will enable it to increase its brand presence and quick-lube footprint in the country. The buyout is likely to be concluded during the first quarter of fiscal 2019. The overall value of the deal has not been disclosed.

The acquisition will add 31 franchised quick-lube centers to the company’s network of more than 1,250 company- and franchise-owned locations in North America. Valvoline will rebrand all Oil Changers quick-lube centers as Great Canadian Oil Change.

Other Notable Acquisitions

In July, Valvoline closed the acquisition of Great Canadian Oil Change Franchising Ltd’s business assets. The buyout added 72 Great Canadian Oil Change franchises to the company’s quick-lube network. Earlier, its franchisee Big River Quality Auto Inc. acquired a quick-lube location based in Evansville, IN. Also, the company acquired a location based in the greater Detroit area.

Further, the company opened the 10th Valvoline Instant Oil Change (VIOC) quick-lube service center in Greater Pittsburgh area. The move expands its existing network of more than 1,150 franchised and owned VIOC stores.

Our Take

Valvoline has been working diligently to strengthen its quick-lube model. In this regard, it has taken several efforts ranging from organic expansion of stores to starting VOIC service stores and Express Care centers at acquired locations. This model allows the company to provide quick and reliable services to its customers through a very convenient approach.

The moves of Valvoline are in sync with this stratagem. The company is poised to grow on the back of solid segmental performance and efficient capital-deployment moves.

However, in the past six months, this Zacks Rank #3 (Hold) stock has lost 7.9% against the industry’s increase of 5.0%. Also, the company has a dismal earnings surprise history with no beats in the trailing four quarters.

Key Picks

Some better-ranked stocks in the same space are Ingevity Corporation (NGVT - Free Report) , W.R. Grace & Co. (GRA - Free Report) and CSW Industrials, Inc. (CSWI - Free Report) . While Ingevity sports a Zacks Rank #1 (Strong Buy), W.R. Grace & Co. and CSW Industrials carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ingevity surpassed estimates in each of the trailing four quarters with an average beat of 20.58%.

W.R. Grace & Co exceeded estimates in each of the trailing four quarters with an average beat of 10.63%.

CSW Industrials surpassed estimates in each of the trailing four quarters with an average beat of 6.93%.

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