Upcoming AWS Coverage on Westrock Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 28, 2017 / Active Wall St. blog coverage looks at the headline from Sealed Air Corp. (NYSE: SEE) as the Company announced on March 27, 2017, that it has entered into a definitive agreement with Bain Capital Private Equity to sell its Diversey Care division and the food hygiene and cleaning business within its Food Care division (together "New Diversey") for approximately $3.2 billion. This agreement is pursuant to the previously announced plan to execute the spin-off of Diversey Care on October 16, 2016. Register with us now for your free membership and blog access at:

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One of Sealed Air's competitors within the Packaging & Containers space, Westrock Co. (NYSE: WRK), is estimated to report earnings on May 05, 2017. AWS will be initiating a research report on Westrock in the coming days.

Today, AWS is promoting its blog coverage on SEE; touching on WRK. Get all of our free blog coverage and more by clicking on the link below:

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Details of the Agreement

Post the completion of this agreement, New Diversey will be led by Dr. Ilham Kadri to develop a pure-play, high-growth hygiene and cleaning solutions Company. The integrated product offering will comprise of floor care machines, tools, chemicals, and services. New Diversey will continue to employ approximately 8,600 people worldwide. For FY16, Diversey Care and the related food hygiene businesses combined generated net sales of approximately $2.6 billion.

Strategic Outlook

During FY16, multiple innovations with end-market growth opportunities led to an increased demand for protein packaging, hygiene, and ecommerce solutions, a niche specific to Diversey Care. However, the net sales were impacted by unfavorable currency, challenging business environments in emerging nations. The Company is executing this step to deliver meaningful value to customers and shareholders.

For Q4 FY16 results reported on February 09, 2017, the Company's Food Care's net sales of $841 million were flat as reported. Currency fluctuations had a negative impact of 2.3%, or $20 million, on the segment's net sales. The Food Care segment achieved more than 5% volume growth in North America in Q4 FY16. On the other hand, Diversey net sales of $493 million declined 0.4% and increased 2.8% on a constant dollar basis for Q4 FY16. Currency played a major role here too as net sales for the segment dropped by 3.2%, or $16 million, in Q4 FY16.

Company Growth Prospects

Diversey has a long and proven track record of leadership in the hygiene and cleaning solutions market on a global basis. The portfolio from Diversey will help Bain Capital gain access to investment opportunities. The integrated global platform and strong growth orientation from Bain Capital will help Diversey implement its strategic vision of organic growth.

Post the execution of the agreement, Sealed Air will function as a provider of food, product, and medical packaging solutions, while continuing to focus on accelerating profitable growth, hence generating strong cash flow. Sealed Air expects to achieve growth through exploiting the end market opportunities and the global adoption of new products and solutions.

Financial Details and Increase in Share Repurchase Program

Post the closure of this agreement, Sealed Air expects to use the proceeds to repay debt and maintain its net leverage ratio in the range of 3.5 to 4.0 times. What's more, Sealed Air's Board of Directors has authorized an increase of the share repurchase program by an additional $1.5 billion, hence amounting the total authorization for future repurchases under the program to approximately $2.2 billion.

The sale of New Diversey is expected to close in the second half of 2017 and is subject to certain regulatory approvals and closing conditions. The results of operations of New Diversey will be reported as discontinued operations beginning in Q1 FY17.

Stock Performance

At the close of trading session on Monday, March 27, 2017, Sealed Air's stock price slipped 2.51% to end the day at $43.55. A total volume of 6.91 million shares were exchanged during the session, which was above the 3-month average volume of 1.83 million shares. The Company's shares are trading at a PE ratio of 17.73 and have a dividend yield of 1.47%. Additionally, the stock currently has a market cap of $8.57 billion.

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SOURCE: Active Wall Street