VVV

VVV

Consumer, Industrial/Transportation, Event Driven/Special Sit


Presented:09/27/2016
Price:$23.68
Cap:$4.88B
Current Price:$41.48
Cap:$5.35B

Presented

Date09/27/2016
Price$23.68
Market Cap$4.88B
Ent ValueN/A
P/E RatioN/A
Book ValueN/A
Div Yield0%
Shares O/S204.50M
Ave Daily Vol13,760,683
Short IntN/A

Current

Price$41.48
Market Cap$5.35B
Valvoline, Inc. engages in the provision of automotive lubricants and motor oils. It operates under the segments: Case North America, Quick Lubes and International. It also offer brands such as All Climate™, DuraBlend™, and MaxLife™. The company was founded in 1866 and is headquartered in Lexington, KY.

Publicly traded companies mentioned herein: Ashland LLC (ASH), Monro Muffler Brake Inc (MNRO), O’Reilly Automotive Inc (ORLY), Valvoline Inc (VVV), WD-40 Company (WDFC)

Highlights

On September 22, 2016, Valvoline (VVV) raised ~$660 million via an IPO (30 million shares; 17% of the company). Ashland, VVV’s former parent, still owns 83% and the presenter expects the spin-off to be complete in ~180 days (March 2017) when the lockup expires. The presenter is long at ~$24 and thinks a combination of an attractive growth profile and shares trading at a meaningful discount to its closest peers provide for a positive risk/ reward profile. Now that the company is independent the management team can use FCF to invest in the business, and a favorable mix shift towards the premium/ synthetic fluids that must be used in newer cars should help boost margins in North America and International markets.

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Idea Discussion

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