Quaker Chemical Corporation KWR recently completed the acquisition of Dipsol Chemicals Co., Ltd., a prominent supplier of surface treatment and plating solutions mainly for the automotive and other industrial sectors, for JPY 23 billion (roughly $153 million). 

Based in Japan, Dipsol operates worldwide, having generated around $82 million in revenues for the 12 months ended Dec 31, 2024. The acquisition value reflects a multiple of about 10.5 times Dipsol's trailing 12-month estimated adjusted EBITDA of approximately $15 million. Quaker financed the deal through borrowings from its existing credit facility.

The company also announced the acquisition of Natech, Ltd., a U.K.-based producer of surface treatment chemicals, for about 4 million GBP (roughly $5.2 million). 

Dipsol and Natech strengthen KWR’s position in their respective markets and product technologies, enhancing its technical service model and broadening its diverse portfolio of products and services. These acquisitions also expand its advanced solutions business in promising end markets with strong growth potential, offering significant opportunities for cross-selling and addressing the evolving needs of global customers.

Quaker Chemical’s shares have lost 43.1% in the past year compared with the Zacks Chemicals Specialty industry’s 2.3% decline.

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Quaker Chemical, on its fourth-quarter call, noted that it remains committed to delivering sustained growth and share gains by advancing its enterprise strategy, refocusing the organization around its customer intimate model and effectively allocating capital.  It is taking additional actions that are expected to deliver run-rate cost savings of at least $20 million this year. KWR expects these actions to boost its operational efficiency, improve competitiveness and allow it to better leverage its global scale. It expects to deliver revenue, adjusted EBITDA and earnings growth in 2025.

KWR’s Rank & Key Picks

KWR currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include Carpenter Technology Corporation CRS, CSW Industrials Inc. CSWI and Axalta Coating Systems Ltd. AXTA

Carpenter Technology currently carries a Zacks Rank #2 (Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 15.7%. The company's shares have soared 156.6% in the past year. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for CSW Industrials’ current fiscal-year earnings is pegged at $8.50. CSWI, carrying a Zacks Rank #2, surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with an average earnings surprise of 10.1%. The company's shares have rallied 29.4% in the past year.

Axalta Coating Systems, which currently carries a Zacks Rank #1, beat the consensus estimate in each of the trailing four quarters. In this time frame, it has delivered an earnings surprise of roughly 16.3%, on average. AXTA’s shares have gained 1% over the past year. 

 

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