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Albemarle (ALB) Wraps Up Sale of Fine Chemistry Services Unit

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Albemarle Corporation (ALB - Free Report) has recently announced that the sell-off of its Fine Chemistry Services business to W. R. Grace & Co. has been concluded. The financial value of the transaction is roughly $570 million. It consists of $300 million in cash and the issuance to Albemarle of preferred equity of a W. R. Grace & Co. subsidiary, having an aggregate stated value of $270 million.

In February 2021, Albemarle had announced its decision to sell the business.

Per the prior communicated terms of the deal, Grace has acquired Albemarle’s operations in Tyrone, PA, and South Haven, MI.

BofA Securities and Troutman Pepper Hamilton Sanders LLP acted as financial and legal advisors to Albemarle in this transaction, respectively.

The divestment reflects Albemarle’s ongoing commitment to actively and continuously refine its portfolio with a focus on its core, growth-oriented business segments. The company noted that the proceeds arising from this transaction will enable it to channelize its resources into its long-term, growth-oriented strategy.

Shares of Albemarle have surged 115.8% in a year, outperforming the industry’s growth of 53.0%. The Zacks Consensus Estimate for 2021 earnings is currently pegged at $3.61 per share, indicating a year-over-year decline of 12.4%.

 

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In the first quarter, the company’s earnings per share of $1.1 topped the Zacks Consensus Estimate of 79 cents and also increased from the year-ago quarter’s figure of $1.00. Revenues increased 12% year over year to $829.3 million, outpacing the Zacks Consensus Estimate of $754 million.

Albemarle expects its performance for full-year 2021 to improve modestly on a year-over-year basis on a sustained recovery in global economic activities. The company continues to expect net sales for 2021 between $3.2 billion and $3.3 billion. Moreover, adjusted EBITDA for the year has been forecasted in the range of $810-$860 million. Albemarle anticipates adjusted earnings per share in a band of $3.25-$3.65 in 2021.

 

Zacks Rank & Key Picks

Currently, Albemarle carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Cabot Corporation (CBT - Free Report) , Dow Inc. (DOW - Free Report) and Olin Corporation (OLN - Free Report) , each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cabot has a projected earnings growth rate of 125.9% for the current year. The company’s shares have risen 62.8% in a year.

Dow has a projected earnings growth rate of 261.5% for the current year. The company’s shares have jumped 65.7% in a year.

Olin has a projected earnings growth rate of 325.6% for the current year. The company’s shares have seen a surge of 271.4% in a year.

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