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Koppers (KOP) Closes Denver Plant Sale, Aims for Optimization

Koppers (KOP) completes the sale of its Denver facility to an affiliate of Hines and EnviroFinance Group and expects cash proceeds of $30 million from the deal.

This story originally appeared on Zacks

Koppers Holdings Inc. KOP recently closed the sale of its facility in Denver, CO, to an affiliate of Hines, an international real estate firm, and EnviroFinance Group, a Denver-based brownfield redeveloper.

The sprawling property of 60 acres is located near Denver's central business district and the Denver International Airport.

The company is carrying out a network optimization program and has therefore shifted its crosstie treatment activities from its Denver facility. The cleaning, decommissioning, and demolition of its wood-treating operations have already been completed at the facility in early 2021.

Koppers noted that the transaction reflects the newest measures taken by it for optimization of its network and market expansion. From the sale, the company expects cash proceeds of $30 million that is included in the projected net capital expenditures of $80 million to $90 million for 2021.

Shares of Koppers have rallied 38.7% in a year compared with the industry’s rise of 17.3%. The estimated earnings growth rate for the company for the current year is pegged at 7.8%.

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Koppers, in its last earnings call, stated that it continues to focus on driving improvements through the execution of its strategic initiatives and making progress toward its long-term financial goals.

The company anticipates sales for 2021 in the range of $1.7-$1.8 billion and adjusted EBITDA in the band of $220-$230 million. Koppers sees adjusted earnings per share for 2021 in the range of $4.35-$4.60 and investments of $110-$120 million in capital expenditures.

Zacks Rank & Stocks to Consider

Currently, Koppers carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the basic materials space include Tronox Holdings PLC TROX, Methanex Corporation MEOH, and Olin Corporation OLN, each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Tronox has a projected earnings growth rate of 75.1% for the current year. The company’s shares have surged 319.6% in a year.

Methanex has a projected earnings growth rate of 422.8% for the current year. The company’s shares have climbed 76.6% in a year.

Olin has a projected earnings growth rate of 86.4% for the current year. The company’s shares have rallied 222.8% in a year.

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