Quaker completes big acquisition

Article Excerpt

QUAKER CHEMICAL CORP. $157 (New York symbol KWR; Income Portfolio, Manufacturing & Industry sector; Shares o/s: 13.3 million; Market cap: $2.1 billion; Price-to-sales ratio: 3.3; Dividend yield: 1.0%; TSINetwork Rating: Average; www.quakerchem.com) closed its acquisition of rival Houghton International Inc. on August 1, 2019. Based in Philadelphia, that firm makes specialty chemicals, oils, and lubricants for customers in the automotive, aerospace, mining, and beverage industries. Under the terms of the takeover, Houghton’s owners received $170.8 million in cash and a 24.5% stake in the combined company. To satisfy competition regulators, Quaker sold certain steel and aluminum product lines of Houghton for $37.0 million. The new operations will likely lift the company’s forecast earnings from $6.12 a share in 2019 to $7.57 in 2020. The stock trades at a reasonable 20.7 times the 2020 estimate. The $1.54 dividend yields 1.0%. Quaker Chemical is a buy. buy…