Friday, December 13, 2013

Seeking Alpha: Rockwood Is Lean And Mean, But Not Overlooked

After a series of deals, Rockwood Holdings (ROC) management now has the business it says it wanted. In agreeing to sell the ceramics, clay-based additives, and pigments businesses, Rockwood is not only about to be flush with cash, but a company highly focused on and committed to its lithium and surface treatment businesses.

That's perfectly fine with me, as I think there are solid reasons to expect good growth in lithium demand and I believe Rockwood can put surplus capital to work expanding the surface treatment operations through select/precision acquisitions. What's not so fine with me is the valuation. I get that many investors are enamored of what electric vehicle adoption could mean for future lithium demand, but I'm not as excited about an opportunity where I have to pay more than 10x EBITDA just to get today's valuation on the shares.

Please read more here:
Rockwood Is Lean And Mean, But Not Overlooked

No comments: