Jefferies & Company Reports on Ashland

Jefferies & Company commented on Ashland ASH in a report released today. In the report, Jefferies was positive in its assessment of the company. Jefferies writes, "Ashland plans to acquire International Specialty Products (ISP), a global chemical manufacturer of functional ingredients and technologies, for $3.2bn (2x LTM sales, 8.9x EBITDA). The deal should be immediately accretive to earnings. Upon completion, Ashland will have transformed the mix to the point that 3/4 of EBITDA is derived from specialty chemicals. We view the deal as an incremental positive and reiterate our Buy rating. Shifting the center of gravity to specialty chemicals. Following the acquisition of ISP, Ashland will have transformed from a 15% specialty, $0.6bn EBITDA (10% margin) company (2004 metrics) to a 74% specialty, $1.1bn EBITDA company (14.5% pro forma margin) by 2012." Jefferies currently has a Buy rating on Ashland and a price target of $79. Shares of ASH closed at $68.34 on Tuesday.