The increase follows the announcement of the company's acquisition of the wood preservation and railroad services businesses of Osmose Holdings Inc.
The base price of the acquisitions is $460 million. Koppers plans to finance the acquisition through a new term loan and an increase to the company's existing revolving credit facility.
The deal is expected to close in the third quarter of this year.
TheStreet Ratings team rates KOPPERS HOLDINGS INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate KOPPERS HOLDINGS INC (KOP) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly increased by 123.17% to $52.00 million when compared to the same quarter last year. In addition, KOPPERS HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of 13.24%.
- KOP, with its decline in revenue, underperformed when compared the industry average of 12.7%. Since the same quarter one year prior, revenues slightly dropped by 8.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The share price of KOPPERS HOLDINGS INC has not done very well: it is down 9.11% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- 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 130.1% when compared to the same quarter one year ago, falling from $13.60 million to -$4.10 million.
- You can view the full analysis from the report here: KOP Ratings Report