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Univar (UNVR) Intends to Offer of Senior Notes Worth $400M

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Univar Solutions Inc. announced that its fully-owned subsidiary — Univar Solutions USA Inc., plans to offer $400 million in total principal amount of new senior notes due 2027 in a private offering, subject to market and other conditions.

The notes will be treated as senior unsecured obligations of Univar Solutions USA. It will be guaranteed by Univar along with certain of its domestic subsidiaries.

Univar to use the net proceeds from the proposed offering along with cash in hand and the proceeds of the borrowing under a new USD term loan B facility to redeem all the outstanding total principal amount of Univar Solutions USA's 6.75% senior notes due 2023. As of Nov 12, 2019, the outstanding total principal amount of the notes was $400 million.

Moreover, the company intends to repay all the outstanding total principal amount of the existing Euro term B-2 loan facility as well as pay any associated expenses and fees related to the foregoing. As of Nov 12, 2019, the outstanding total principal amount of the EUR Term Loan is Eur 350 million.

Notably, Univar Solutions USA already issued notice of its intention to redeem all of the existing notes at a redemption price that is equal to 101.688% of the principal amount along with accrued and unpaid interest to the date of redemption.

Per the company, the redemption is subject to the financial condition of completing an offering of new unsecured senior notes in a total principal amount of at least $400 million. However, Univar Solutions USA has the right to waive this financing condition according to its discretion.

Univar’s shares have inched up 0.2% in the past year against the 22.4% decline of the industry.



For 2019, Univar revised its adjusted EBITDA forecast, factoring in lower-than-expected demand for chemicals and ingredients. The company now expects adjusted EBITDA in the range of $700-$725 million compared with $725-$740 million mentioned earlier.

Moreover, Univar expects adjusted EBITDA in the band of $155-$180 million for the fourth quarter of 2019, suggesting a rise from $144 million in the year-ago quarter.

Zacks Rank & Stocks to Consider

Univar currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Kirkland Lake Gold Ltd , Franco-Nevada Corporation (FNV - Free Report) and Agnico Eagle Mines Limited (AEM - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kirkland Lake Gold has an expected earnings growth rate of 96.3% for the current year. The company’s shares have surged 152.2% in the past year.

Franco-Nevada has projected earnings growth rate of 44.4% for 2019. The company’s shares have rallied 50.9% in a year.

Agnico Eagle has an estimated earnings growth rate of 168.6% for the current year. Its shares have moved up 69.1% in the past year.

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