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Olin (OLN) Acquires White Flyer Targets to Grow Winchester

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Olin Corporation (OLN - Free Report) has agreed to acquire the assets of White Flyer Targets, LLC, a prominent leader in recreational trap, skeet and sporting clay targets across North America. This strategic move will involve integrating White Flyer Targets with the Winchester Ammunition business.

The acquisition encompasses White Flyer's advanced manufacturing facilities located in Coal Township, PA, Dalton, GA, Webb City, MO, Knox, IN and San Bernardino, CA. This deal also encompasses White Flyer's newly introduced ECO FLYER target product line.

The completion of this transaction is contingent upon Olin's successful completion of thorough due diligence, finalization of definitive agreements and receipt of final approval of both companies' board of directors. Given the nature of the deal, it is not anticipated to necessitate any premerger filings. The transaction is projected to conclude in the fourth quarter of 2023. Olin intends to finance the acquisition using its existing cash reserves and anticipates the move to immediately enhance shareholder value.

Olin exceeded second-quarter 2023 earnings expectations. Earnings of $1.13 per share surpassed the Zacks Consensus Estimate of $1.04. Revenues declined 35% to $1,702.7 million year over year and missed the Zacks Consensus Estimate of $1,850.2 million due to lower volumes in chemical businesses.

Winchester segment revenues experienced a 16.7% year-over-year decline to $366.6 million on lower commercial ammunition shipments, which were partly offset by higher military sales. The company anticipates challenges in its Chemical operations for the third quarter due to global economic factors and issues with the Freeport, TX vinyl chloride monomer facility. However, the performance of the Winchester segment is predicted to improve sequentially in the same quarter due to growth in military markets, both domestically and internationally.

Shares of Olin have risen 0.3% in the past year against a 0.3% fall of the industry.

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Zacks Rank & Key Picks

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

Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation (CRS - Free Report) and Hawkins, Inc. (HWKN - Free Report) , both sporting a Zacks Rank #1 (Strong Buy), and Livent Corporation , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The earnings estimate for Carpenter Technology’s current year is pegged at $3.36, indicating year-over-year growth of 194%. CRS beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 10%. The company’s shares have rallied 58.6% in the past year.

The consensus estimate for Hawkins’ current-year earnings is pegged at $3.40, indicating year-over-year growth of 18.9%. HWKN beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 25.6%. The company’s shares have rallied 30.5% in the past year.

The consensus estimate for Livent’s current-year earnings is pegged at $2.12, indicating year-over-year growth of 51.4%. In the past 60 days, LTHM’s current-year earnings estimate has been revised upward by 3.4%. LTHM beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 19%.


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