Chart Industries, Inc. GTLS yesterday announced that it agreed to sell its cryobiological products business in a cash transaction worth $320 million. The purchaser of the business will be Brentwood, TN-based Cryoport, Inc. CYRX.
Subject to the fulfillment of customary closing conditions, the divestment is expected to be completed in fourth-quarter 2020.
It is worth noting here that Cryoport is engaged in providing biostorage services and temperature-controlled logistics for use in the life sciences industry. It has operations in the Asia Pacific, the Americas, the Middle East, Africa and Europe.
Discussion on Divestment
As noted, the to-be-divested business offers products that are mainly used in the transportation of biological samples. Also, the cryobiological products are used in animal breeder applications as well as in storing tissue, plasma, vaccinations, cells and blood. The products have dedicated manufacturing facilities and no common customers with the other businesses of Chart Industries.
Notably, the to-be-divested business is grouped under Chart Industries’ Distribution & Storage Western Hemisphere segment. The segment was the highest revenue generator in the second quarter of 2020, accounting for $106.8 million of Chart Industries’ sales of $310.4 million.
Further, Chart Industries mentioned that the divestment of the cryobiological products business will enable it to concentrate on growth opportunities in clean energy — including carbon capture, hydrogen, LNG and biogas/biomethane. Using the proceeds, dent repayment will be given a priority.
Zacks Rank, Estimate Trend and Price Performance
Chart Industries currently has a market capitalization of $2.7 billion and sports a Zacks Rank #1 (Strong Buy). The company is to benefit from solid product offerings and orders, cost-saving actions, and planned investments.
In the past three months, its shares have gained 64.7% compared with the industry’s growth of 13.5%.
Meanwhile, the Zacks Consensus Estimate for its 2020 earnings has improved 21.3% to $3.13 in the past 60 days on the back of six upward revisions. Similarly, estimates for 2021 increased 19.1% to $3.99 on six upward revisions during the same period. Notably, there was no downward revision in estimates for both years.
Chart Industries, Inc. Price and Consensus
Stocks to Consider
Two better-ranked stocks in the industry are Altra Industrial Motion Corp. AIMC and Tennant Company TNC. Both the companies currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, earnings estimates for these companies have improved for the current year. Further, earnings surprise for the last reported quarter was 76.47% for Altra Industrial and 380.00% for Tennant.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.