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Univar Selected to Distribute Inovyn's Chlorinated Paraffins

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Univar Solutions Inc. (UNVR - Free Report) announced that it has been selected by Inovyn to distribute its complete line of Cereclor chlorinated paraffins in the United States.

Univar’s combination with Inovyn offers market-leading capabilities for the customers, which will boost next generation solutions. Customers in key end-market segments in the United States will benefit from Univar's extensive supply chain network and leading digital technology.

Univar stated that the addition of a strong chlorinated paraffin line to its leading portfolio will enable it to offer the best range of specialty and base chemicals serving end-markets including lubricants and metal working fluids.

Notably, Cereclor is a leading brand of chlorinated paraffins having properties that are well-suited to serve various applications and end-markets such as PVC enhancement, sealants, coatings, metalworking and metalworking fluids, adhesives as well as rubber chemicals.

The chemistries offer various application-specific benefits that include extension of life of machine tools. They also help to prevent welding, seizure or scuffing during metal forming or metal cutting operations under extreme pressure and high load. They can also act as a plasticizer (imparting flame-retardant properties) and provide improved stain resistance in rubber, PVC and coating applications.

Univar’s shares have tumbled 22.1% in the past year compared with the 37% decline of the industry.

In August, the company revised its adjusted EBITDA forecast considering lower-than-expected demand for chemicals and ingredients, higher-than-expected net cost synergies from Nexeo as well as outlook from many supplier partners. It now expects adjusted EBITDA in the range of $725-$740 million compared with the previous view of $740-$760 million.

Univar is progressing well with the integration of Nexeo's chemical distribution customers, suppliers and support functions. The company now sees higher cost-saving synergies from Nexeo than what it had originally anticipated. It raised guidance for annual net synergy from $100 million to $120 million (before tax). Univar expects to achieve $20 million in net synergies this year, higher than the initial expectations of $10 million.

Zacks Rank & Key Picks

Univar currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the basic materials space are Kinross Gold Corporation (KGC - Free Report) , Alamos Gold Inc (AGI - Free Report) and Arconic Inc (ARNC - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross has an expected earnings growth rate of 155.7% for 2019. The company’s shares have surged 71% in the past year.

Alamos Gold has projected earnings growth rate of 324% for the current year. The company’s shares have rallied 37.2% in a year’s time.

Arconic has an estimated earnings growth rate of 50% for the current year. Its shares have moved up 19.3% in the past year.

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