Industrial gas giant
) has acquired Monroe, La.-based EPCO Carbon Dioxide Products,
Inc., a privately-held company that manufactures and markets
liquid carbon dioxide (CO2). The buyout also includes
Illinois-based Louisiana Leasing, Ltd., an affiliate to EPCO that
owns liquid CO2 distribution assets solely leased to the host
company. The transaction cost for this buyout has not been
EPCO, established in 1987, operates with nearly 170 employees and
earned revenues of roughly $60 million in 2012. It is the biggest
North American independent liquid CO2 company that focuses on the
production and distribution of liquid CO2 for the food and
beverage, oil field services, and chemicals markets.
The EPCO buyout complements Air Products' aim of expanding its
portfolio of industrial gases offerings, mainly liquid CO2, in
North America via EPCO's 12 CO2 purification and liquefaction
plants situated in the central part of the U.S.
Air Products already offers liquid CO2 across the globe. Liquid
CO2 is a chief product supplied in the food, beverage, chemical,
pharmaceutical, oil field services, and metals fabrication
markets among other merchant industrial gases.
Air Products' second-quarter fiscal 2013 (ended Mar 31, 2013)
earnings from continued operations was $1.37 a share, in line
with the Zacks Consensus Estimate. Revenues rose 6% year over
year to $2,484.2 million aided by acquisitions, but missed the
Zacks Consensus Estimate of $2,585 million. Management cut its
earnings guidance for fiscal 2013 citing challenging economic
Air Products benefits from a diverse customer base, sustained
pricing power and cost-reduction measures. While new business
deals and strategic investments are expected to support results
in fiscal 2013, volume in the core Merchant Gases segment is
expected to remain under pressure and the electronics business
may continue to see weak demand. Higher energy costs also pose a
threat to margin expansion.
Air Products currently maintains a Zacks Rank #4 (Sell).
Other companies in the chemical industry with favorable Zacks
Shin-Etsu Chemical Co., Ltd.
). All of them hold a Zacks Rank #1 (Strong Buy).
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