Chemical and advanced materials maker, Celanese CE has wrapped up its acquisition of Forli, Italy-based SO.F.TER. Group, one of the largest independent thermoplastics compounders in the world with operations in Italy, Mexico, Brazil and the U.S. The company announced the deal in Oct 2016. Financial details of the transaction were not divulged.
Under the deal, Celanese has purchased SO.F.TER. Group’s comprehensive product portfolio of engineering thermoplastics, thermoplastic elastomers, as well as all customer agreements and all manufacturing, technology and commercial facilities. The acquisition is complementary to Celanese’s global engineered materials business.
The buyout nearly doubles the number of Celanese global engineered materials platforms. It also expands Celanese’s solutions capability and project pipeline. SO.F.TER. Group’s modern manufacturing facilities and product portfolio will also offer opportunities for additional growth, investment and synergies.
Celanese’s adjusted earnings for third-quarter 2016 topped the Zacks Consensus Estimate while sales missed expectations. The company’s advanced engineered materials business posted a third-quarter record operating profit and delivered the highest ever quarterly adjusted earnings before interest and tax (EBIT).
Celanese’s strategic measures including productivity and efficiency improvement actions should lend support to its earnings in 2016. The company remains on track to achieve around $100 million of productivity benefits on a year-over-year basis in 2016 and has identified incremental productivity opportunities of another $100 million for 2017.
The company retained its expectations of 8–10% growth in adjusted earnings per share for 2016, factoring in the benefits of productivity actions and operational excellence as well as strength of commercial models. Celanese is looking to expand and grow its engineered materials pipeline in 2017 and launch multiple new projects in the engineered materials space leveraging the capabilities added through the SO.F.TER. buyout.
Celanese currently carries a Zacks Rank #2 (Buy).
CELANESE CP-A Price
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Other Stocks to Consider
Other well-placed companies in the chemical space include The Chemours Company CC, Koppers Holdings Inc. KOP and FMC Corporation FMC, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chemours has an expected earnings growth of around 44.7% for the current year.
Koppers Holdings has an expected earnings growth of 62.4% for the current year.
FMC has an expected earnings growth of around 14.1% for the current year.
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