Secondary Offering by Sealed Air - Analyst Blog

Sealed Air Corporation SEE announced that WRG Asbestos PI Trust, which is also the selling stockholder, has agreed to sell 5 million shares in an underwritten secondary offering on a bought deal basis. The offering has priced at 10 cents per share.

Concurrently with and upon the completion of this offering, Sealed Air has agreed to purchase $130 million shares from the selling stockholder at the price at which the shares are sold to the underwriter in the secondary offering.

Credit Suisse Securities USA LLC a subsidiary of Credit Suisse Group AG CS will serve as the sole underwriter of the offering. No shares are being sold by Sealed Air.

On Apr 30, Sealed Air reported first-quarter 2014 adjusted earnings of 33 cents per share, up 43% year over year. The results also surpassed the Zacks Consensus Estimate of 24 cents per share.

During the quarter, the company funded the W. R. Grace & Co. Settlement and related accrued interest with $555 million of accumulated cash and cash equivalents and $375 million from committed credit facilities, contributing to the net cash used in operating activities of $938 million in the three months ended March 31, 2014.

For fiscal 2014, Sealed Air reiterated its guidance for net sales to be relatively flat compared with net sales of $7.7 billion in 2013. Adjusted earnings per share, excluding  impact of stock appreciation rights (SARs) is also reaffirmed in the range of $1.50 to $1.60.

Sealed Air will benefit from cost savings from its ongoing Integration & Optimization Program as well as its recent additional restructuring plan. However, economic uncertainty, unfavorable foreign currency translation and volatility in raw material price will continue to affect its results in 2014.

Elmwood Park, NJ-based Sealed Air is a major specialty packaging service provider to a diverse range of end markets. The company operates in the United States and in 50 other countries, producing packaging and performance-based materials, and equipment systems serving food, medical, industrial and consumer applications.
 
Sealed Air carries a Zacks Rank #3 (Hold).

Some favorably ranked stocks in the same industry include Crown Holdings Inc. CCK and Graphic Packaging Holding Co. GPK. While Crown Holdings holds a Zacks Rank #1 (Strong Buy), Graphic Packaging sports a Zacks Rank #2 (Buy).