Univar (UNVR) Selected As Distributor For BASF's Baxxodur

Univar Inc. (NYSE:UNVR) announced that it has been selected as BASF's authorized Midwest United States distributor for Baxxodur polyetheramine curing agents and chain extenders.

Notably, BASF markets a wide array of amine-based curing agents for professional epoxy resin and polyurea processing under the Baxxodur brand.

Univar’s expansive distribution network along with in-depth industry knowledge enables it to represent these specialty products in the coatings, adhesives, sealants and elastomers (CASE) markets.

Moreover, the distribution deal provides a great opportunity to Univar for adding a highly complementary product to its CASE portfolio.

Univar’s shares have lost 32.8% in the past year compared with the 44.1% decline recorded by its industry.

In second-quarter 2019 earnings call, the company revised its adjusted EBITDA forecast considering lower-than-expected demand for chemicals and ingredients, higher-than-expected net cost synergies from Nexeo and outlook from many supplier partners. It now expects adjusted EBITDA between $725 million and $740 million compared with the previous view of $740 million and $760 million.

Univar is progressing well with the integration of Nexeo's chemical distribution customers, suppliers and support functions. The company now sees higher cost-saving synergies from Nexeo than what it had originally anticipated. It has raised guidance for annual net synergy from $100 million to $120 million (before tax). Univar expects to achieve $20 million in net synergies this year, higher than the initial expectations of $10 million.

Zacks Rank & Key Picks

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

Some better-ranked stocks in the basic materials space are Kinross Gold Corp. (NYSE:KGC) , Alamos Gold Inc. (TSX:AGI) and Arconic Inc. (NYSE:ARNC) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross has an expected earnings growth rate of 150% for 2019. The company’s shares have surged 72.3% in the past year.

Alamos Gold has projected earnings growth rate of 320% for the current year. The company’s shares have rallied 68.6% in a year’s time.

Arconic has an estimated earnings growth rate of 50% for the current year. Its shares have moved up 15.2% in the past year.

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