Seeking Alpha: Albemarle Pays A Stiff Price For A Premium Asset

I wrote about Rockwood Holdings (NYSE:ROC) in December of 2013 and thought at the time that it was a very high-quality specialty chemical company, with an attractive cost-advantaged lithium business, but an expensive stock. That opinion worked reasonably well until today, as other chemical companies like BASF (OTCQX:BASFY) and Taminco (NYSE:TAM) had been outperforming the shares. That's all moot now, though, as Albemarle (NYSE:ALB) has stepped up with a premium buyout offer for this specialty chemical company.

For Albemarle's part, they're paying up to add a well-run surface treatments business and grab the growth potential of Rockwood's top-notch lithium operations. Paying 14x 2014 pro-forma EBITDA (and more than 11x assuming synergies) is steep, but Rockwood is a unique asset with both strong internal returns and good growth potential leveraged to the developing electric vehicle market.

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Albemarle Pays A Stiff Price For A Premium Asset

Seeking Alpha: FMC Corp's Exceptional Performance Comes At A Cost

There are a lot of really good things about FMC Corporation (FMC). The company's unusual model in agricultural chemicals allows for exceptional margins, and the company's food/nutrition business is a leader in close to two-thirds of its operations. The only fly in the ointment is that investors are well aware of FMC's exceptional growth and its different model, and the valuation on these shares is not low.

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FMC Corp's Exceptional Performance Comes At A Cost

Investopedia: FMC A Three-For-One Chemical Company

In the past couple of years, investors have paid a great deal of attention to the agricultural, industrial and battery markets. FMC Corp (NYSE:FMC) is a relatively rare chemicals company in that addresses all three markets. While FMC has enjoyed a great run already, investors may yet be able to wring even more leverage out of a company that seems to be executing as well as any in its markets. 

Solid Second Quarter Performance
FMC met guidance with a little less than 5% revenue growth in the second quarter. Sales growth was led by the agricultural business (which grew 12%), while the specialty business grew 6%. Reported growth in the industrial category was down 5%, but adjusting for asset/business dispositions underlying growth was more on the order of 7% to the positive.

FMC has seen more than a year of ongoing margin expansion and this quarter was no different. Gross margin grew more than two and a half full points from the year-ago level, and operating income jumped more than 18% for the quarter.


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http://stocks.investopedia.com/stock-analysis/2011/FMC-A-Three-For-One-Chemical-Company-FMC-BAL-CORN-POT-DD0808.aspx

A123 Needs To Recharge

What is there to say about the high-tech battery sector today? Advanced lithium batteries are still the most likely clean-tech option to get traction in the auto sector, but large-scale rollouts are still off in the distance. In the meantime, investors have certainly turned on the smaller, riskier names in this sector and sent the stocks down while the overall market has done alright. 

The Quarter that Was
A123 once again came up short on the revenue line this quarter, as sales totaled a bit under $23 million. Transportation revenue (which is close to half of the total) was flat sequentially, while consumer revenue and service revenue both grew nicely. The company did not record any electric grid revenue this quarter, and the company shipped 10% fewer megawatts on a sequential basis. 


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http://stocks.investopedia.com/stock-analysis/2010/A123-Needs-To-Recharge-AONE-NAV-PC-HEV-JCI0812.aspx