NEW YORK (TheStreet) -- Platform Specialty Products Corp. (PAH) - Get Report stock is up 5.53% to $11.35 in afternoon trading on Wednesday after the company and private equity firm Apollo Global Management (APO) completed the acquisition of OM Group (OMG).
The companies paid $34 per share in cash for OM, which stopped trading on the New York Stock Exchange today.
Platform Specialty Products, a diversified specialty chemicals producer, will acquire OM's electronic chemicals and photomask businesses from Apollo for about $367 million in cash in a separate transaction that is expected to close in January.
OM's other businesses, such as magnetic and battery technologies, will continue to operate under Apollo.
"We are very excited to bring these highly-complementary businesses into the Platform family and further develop our performance applications segment," Platform Specialty Products COO Benjamin Gliklich said in a statement.
Separately, TheStreet Ratings team rates PLATFORM SPECIALTY PRODUCTS as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
We rate PLATFORM SPECIALTY PRODUCTS (PAH) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been generally deteriorating net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Chemicals industry. The net income has significantly decreased by 3136.1% when compared to the same quarter one year ago, falling from -$0.38 million to -$12.20 million.
- This stock's share value has moved by only 55.44% over the past year. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- PLATFORM SPECIALTY PRODUCTS's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. This year, the market expects an improvement in earnings ($0.75 versus -$1.58).
- The gross profit margin for PLATFORM SPECIALTY PRODUCTS is rather high; currently it is at 52.84%. Regardless of PAH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PAH's net profit margin of -1.80% significantly underperformed when compared to the industry average.
- Even though the current debt-to-equity ratio is 1.05, it is still below the industry average, suggesting that this level of debt is acceptable within the Chemicals industry. Despite the fact that PAH's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.01 is high and demonstrates strong liquidity.
- You can view the full analysis from the report here: PAH