CPO's Acquisition of National Starch Fits Like Glove
Analysts at Citigroup reiterate their "hold" rating on Corn Products International Inc (NYSE: CPO), while revising their estimates for the company. The target price for CPO is set to $37.
According to Citigroup, “Corn Products has announced an agreement to acquire National Starch, a specialty starch producer from AkzoNobel for $1.3 billion, with the deal expected to close by the end of 3Q10.” “The deal would increase CPO’s sales in the Asia Pacific region by over 80% from approximately $400 million to $730 million, with access to markets previously not in the fold at CPO such as Australia and the Philippines,” the analysts say.
“We see the acquisition of National Starch by CPO as a very nice fit as the acquired assets are part of CPO’s core business and expand CPO’s emerging market presence, which should bolster the firm’s long term growth characteristics… we believe the acquisition is well conceived,” Citigroup adds.
Citigroup has lowered its EPS estimate for 2010 from $2.60 to $2.55, while raising its estimate for 2011 from $2.80 to $2.85.
