Avient rises on sale of Distribution business, PT raise
12/08/2022 17:19
** Shares of specialized polymer materials maker Avient Corp
AVNT.N up as much as 7.38% at $48.29
** Co to sell its Distribution business to affiliate of
H.I.G. Capital for $950 mln in cash urn:newsml:reuters.com:*:nPn7BpH6na
** The plan to exit Distribution business was announced in
April when it acquired protection fiber maker Dyneema for $1.49
bln, which sent shares up over 6% in early trade urn:newsml:reuters.com:*:nL3N2WI2SR
** Brokerage Jefferies says both deals are likely to expand
co's EBITA margins by 129 bps in 2023 and expects an increase in
shareholder returns after the deal proceeds are used to pay down
debt; raises PT to $58 from $51
** Jefferies expects stranded costs from the acquisition to
be around $5 mln-$6 mln
** Jefferies says sales from its recent Dyneema purchase
will be somewhat recession-resistant, and will likely buoy co's
EPS when the US demand environment slows
** 5 out of 10 brokerages rate the stock "strong buy", 4
rate "buy", and 1 "hold"; their median PT is $58
** AVNT's stock was down over 15% YTD
(Reporting by Ankit Kumar in Bengaluru)
((Ankit.Kumar2@thomsonreuters.com))