OM Group Inc. (OMG)
This one caught my attention too. Although they do not pay a dividend, they have a low PE, are in a good sector that will allow future growth with their value added process technology and before their recent acquisition had an excellent LT debt profile when compared to their annual net income ( close to 1:1).
Also, I was not sure if the recent acquisition impacted how their BV was calculated. The recent acquisition equals $993M and probably includes a lot of goodwill w/ no direct tangible value. It still looks like a good fit but for them to accomplish the recent purchase they had to take on some debt. The new long-term financing includes:
* a $200 million multi-currency revolving credit facility, due 2016, which is undrawn at closing
* a $100 million Term Loan A due 2016
* a $350 million Term Loan B due 2017
* and a 175 million Euro Term Loan B due 2017
Until I can see the combined financials, their excellent long term debt profile is now only OK with a 7:1 ratio LT Debt/ net annual income. Before the purchase it was 1:1. Still in an acceptable range but does this close to $1B purchase lower their Forward PE and/or increase revenues substantially and/or open up new markets for the company.
OM Group Completes Acquisition of Vacuumschmelze
finance.yahoo.com
Aug. 2, 2011 /PRNewswire/ -- OM Group, Inc. (NYSE:OMG - News) today announced that it has completed its previously announced acquisition of Vacuumschmelze GmbH & Co. KG (VAC) of Hanau, Germany, a global market leader in advanced materials and specialty magnetics, for approximately 700 million Euros, including $50 million in common stock. The company announced its intent to acquire VAC on July 5, 2011.
------------------------------------------------------------------------------------------------------
Several of these "Process technology" companies if purchased at the right price could do well in a slow growth world economy. Their value added processes can demand high margins and are used world wide. This is the case in some of the specialty Chemical and Ag sectors too. Also, this is where the U.S. innovators have their edge as we can export this type of technology to manufacturing facilities around the world. That was one reason why I also liked AMAT.
EKS |
