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Univar Acquires Certain Assets of Mosaic's HFS Business

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Univar Solutions Inc. recently announced that it acquired certain assets of the hydrofluorosilicic acid (“HFS”) business of The Mosaic Company (MOS - Free Report) in late 2019.

Notably, Univar is a major supplier to the water treatment market, including the U.S. municipal market, with a wide variety of chemical products for application at all water treatment levels.

Per the terms of the arrangement, some of Mosaic's customer contracts, rail and supply-chain deals have been assumed by Univar to extend and boost its capabilities to better serve municipal drinking water plants. Notably, Univar is working with other HFS producers to ensure high quality and reliable supply of HFS.

Per management, with the addition of new capabilities, Univar is well-placed to help suppliers and customers overcome problems of complex water treatment. The company can help drive sustainable and next-generation solutions for customers throughout the United States by investing in its water treatment business and depending on the experienced team’s expertise.

Notably, the dedicated water treatment team of Univar provides on-site evaluations, technical assistance and specialized market expertise to solve the needs of complex water treatment.

The company’s shares have lost 30.8% over a year compared with a 35.9% decline recorded by its industry.

 

 

Univar slipped to a loss of $55.1 million or 33 cents per share in fourth-quarter 2019 from a profit of $1.2 million or a penny per share a year ago. Adjusted earnings per share of 29 cents per share lagged the Zacks Consensus Estimate of 33 cents.

Net sales rose 9% year over year to $2,155 million in the fourth quarter. However, it lagged the Zacks Consensus Estimate of $2,273 million.

On the fourth-quarter earnings call, Univar envisioned sustained weakness in end markets and a challenging competitive environment for the first half of 2020. It expected the first quarter to be the weakest of the year.

For 2020, the company sees adjusted EBITDA of $700-$740 million. Univar expects adjusted EBITDA of $150-$160 million for the first quarter of 2020.

It also expects to generate free cash flow of $120-$170 million for 2020.

Univar Inc. Price and Consensus

 

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks in the basic materials space are Daqo New Energy Corp. (DQ - Free Report) , and NovaGold Resources Inc. (NG - Free Report) .

Daqo New Energy has a projected earnings growth rate of 353.7% for 2020. The company’s shares have rallied 73.9% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

NovaGold has a projected earnings growth rate of 11.1% for 2020. It currently carries a Zacks Rank #2 (Buy). The company’s shares have surged 117.4% in a year.

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