On Jan 25, Zacks Investment Research upgraded specialty
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Chemtura remains focused on expanding in faster growing
economies and markets to capture new product opportunities while
establishing appropriate value-based pricing levels for its
products. The company is emphasizing on managing costs and
improving operating efficiency.
Chemtura, which is focused on becoming a superior-performing
specialty chemicals company, aims that its portfolio will deliver
20% adjusted EBITDA margins.
In Dec 2013, Chemtura successfully completed its sale of the
Consumer Products business including dedicated manufacturing
plants in the U.S. and South Africa to KIK Custom Products Inc.
for an adjusted purchase price of $300 million. The $15 million
reduction reflects the resolution of certain pre-closing matters
by the parties. The deal is expected to expand the company's
margins to meet financial and strategic performance goals.
In Oct 2013, Chemtura announced that it will sell its
agrochemicals business, Chemtura AgroSolutions, if an offer with
an attractive valuation was presented. The sale of this business
will be an opportunity for Chemtura to become a pure-play
industrial specialty chemicals company. The company will become a
more focused global specialty chemicals company with a simple
portfolio. It will allow for greater management focus on
opportunities on its Industrial Performance Products and
Industrial Engineered Products segment, each having
manufacturing, sales and distribution characteristics that
provide end-market synergies.
In the third quarter of 2013, Chemtura began to evolve its
debt capital structure to align with its strategic initiatives
and reduce its cost of capital. The company repaid additional $50
million of term loan with proceeds from the sale of its
Antioxidant business. The refinancing actions will cut both
annual interest cost and annual cash interest by roughly $8
million, while meaningfully reducing covenant restrictions
related to specific uses of cash.
Other Stocks to Consider
Other companies in the specialty chemicals space that are
worth considering include
Westlake Chemical Corp.
Sensient Technologies Corporation
Kraton Performance Polymers Inc.
). While Westlake holds a Zacks Rank #1 (Strong Buy), both
Sensient and Kraton retain a Zacks Rank #2 (Buy).
CHEMTURA CORP (CHMT): Free Stock Analysis
KRATON PERFORM (KRA): Free Stock Analysis
SENSIENT TECH (SXT): Free Stock Analysis
WESTLAKE CHEM (WLK): Free Stock Analysis
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