Avient Q1 Profit Rises, Beats Estimates; To Buy Royal DSM's Arm For $1.48 Bln

Avient Corporation (AVNT), a maker of polymer materials, on Wednesday posted a rise in income for the first quarter, amidst a rise in sales and a decline in expenses. Excluding items, the firm's earnings beat the Street view. In addition, the company has reiterated earnings guidance for the fiscal 2022.

Separately, the Ohio-headquartered firm said it has inked a deal with Royal DSM to buy the DSM Protective Materials business for $1.485 billion. The acquisition is also includes the ultra-lightweight specialty fiber brand- Dyneema.

The company also said it is mulling sale of its Avient Distribution business.

For the first three-month period of 2022, the company reported a net income of $84.5 million or $0.91 per share, higher than $79.7 million or $0.86 per share, reported for the same period a year ago.

Excluding items, earnings increased by 11 percent to $0.99, from last year's $0.89.

Eight analysts, on average, polled by Thomson-Reuters were estimating the firm to report earnings per share at $0.95. Analysts' estimates typically exclude one-time items.

Selling and administrative expense was declined to $165.1 million, versus $182 million, reported for the same period of 2021.

Owing to a firm demand, the company posted an operating profit of $128.6 million as against $120.4 million, on year-on-year basis, whereas it reported an EBITDA of $165.8 million, compared with $159 million.

The polymer firm generated sales $1.29 billion, higher than $1.16 billion of last year.

For the second quarter, the company expects an adjusted EPS of $0.92. Analysts', on average, expect the company to report an adjusted EPS of $0.98.

For the fiscal 2022, the Group projects adjusted EPS at $3.50. Analysts', on average, expect the company to report an adjusted EPS of $3.51.

Avient has also announced that it has signed a deal with Royal DSM to buy the DSM Protective Materials business for $1.485 billion.

Excluding intangible amortization, the firm said the acquisition will be immediately accretive to EPS, adding around $0.35 per share on a pro forma basis for 2022.

Robert Patterson, CEO of Avient, said: "The addition of the Dyneema portfolio will raise Avient's material offerings to the highest levels on the performance spectrum of composites and engineered fibers."

For the fiscal 2022, the sales of Dyneema business are estimated to be at approximately $415 million, whereas EBITDA is projected at around $130 million.

The company is financing the acquisition with the support of Morgan Stanley and J.P. Morgan.

The business, to be acquired by Avient includes six production facilities, four research and development centers and around 1,000 employees located around the world.

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