Shawcor announced yesterday the sale of its Pipeline Performance Products businesses, Canusa-CPS and Dhatec, to Seal For Life Industries for $91.5 million.
Seal For Life Industries, a subsidiary of private equity firm Arsenal Capital Partners, offers clients a range of coating and sealing solutions that prevent corrosion, water leakage, fire and heat damage and insulation problems.
Shawcor’s (CA:SCL) president and CEO, Steve Orr, announced in a statement yesterday that although the Products businesses have provided stable returns to Shawcor for many years, its strategic alignment with Shawcor’s forward-looking direction has become limited.
Orr added, “The sale of the business allows the Company to focus on areas where it has the greatest differentiation opportunity for long term growth and serves to remove complexity from the organization. It is anticipated that the proceeds from the sale will be used to fund working capital for growth and to strengthen the balance sheet as we move into 2021.” (See CA:SCL stock analysis on TipRanks)
RBC Capital analyst Keith Mackey reiterated his Buy rating on the stock last week, setting a price target of C$6. Mackey remains bullish on the stock and his price target implies upside potential of around 75%.
Consensus among analysts is slightly more cautious. A Moderate Buy consensus rating is based on 1 Buy and 2 Holds, and an average price target of C$4.33 suggests upside potential of around 27% over the next 12 months.
Shawcor shares have fallen 73% since the beginning of the year.
Related News:
Nikola Tumbles 11% After Losing Truck Order; Wedbush Sticks To Sell
Truist Financial To Resume $2B Share Buyback In 1Q; Shares Rise 3%
Tenet Scraps $350M Hospital Deal As US Regulator Files Lawsuit
