PRNewswire/ — Valvoline Inc. (NYSE: VVV), a global leader in vehicle care powering the future of mobility through innovative services and products, announced the sale of its Global Products business to Aramco for $2.65 billion in cash.
- Separating Global Products and Retail Services will transform Valvoline into a pure-play automotive service provider with 20%+ EPS growth.
- Valvoline will accelerate Retail Services evolution as hybrid and EV populations grow.
- Valvoline expects to use $2.25 billion from the sale of Global Products to accelerate shareholder returns, reduce debt, and invest in Retail Services.
- $957 million in revenue, $0.55 diluted EPS, and $0.58 adjusted EPS for Q3 2022.
- Today, Valvoline will hold a 9 am ET conference call.
Valvoline’s Global Products business fits Aramco’s lubricants growth strategy because it will leverage our global base valvoline 19.99 oil change coupon production, contribute to our R&D, and strengthen OEM relationships. Aramco will build Valvoline’s brand strength and global recognition. Mohammed Y. Qahtani, Senior Vice President of Downstream at Aramco, is excited to have Valvoline’s Global Products join the company.
Valvoline expects to use most of the net after-tax cash proceeds of $2.25 billion to accelerate the return of capital to shareholders through share repurchases. The remaining portion will be used for debt reduction and to invest in Retail Services growth opportunities.
Retail services company has compelling opportunities
Valvoline will benefit from:
The separation will allow Valvoline to capture the compelling growth of Retail Services, building on 15 consecutive years of same-store sales growth, by continuing to expand its retail footprint and focusing on franchisee growth and superior in-store customer experience.
- Retail Services is well-positioned to capture opportunities from an evolving car parc by extending its world-class preventive auto maintenance service model to EV owners, OEMs, and fleets, allowing Valvoline to leverage Retail Services’ strong momentum into the future.
- The company will have more capital allocation flexibility and a capital structure better aligned with Retail Services’ value propositions. Strong financials will help Valvoline grow while returning capital to shareholders.
- Operating Retail Services as an independent company will allow the management team to focus on unlocking the business’s full potential with the support of its Board of Directors, who have significant automotive experience and a strong track record in retail services. Sam Mitchell, CEO, and Lori Flees, President, will lead Valvoline’s retail business.
The company expects Retail Services sales of $1.5 billion in fiscal 2022, up 20% from fiscal 2021.
Preliminary Financial Results for Q3 2022
Valvoline reported preliminary third-quarter financial results ending June 30, 2022.
- Preliminary $99 million net income, $0.55 diluted EPS.
- $0.58 adjusted EPS and $180 million adjusted EBITDA.
- $957m in preliminary sales.
- Retail Services sales grew 16% and system-wide same store sales grew 9.9%, with a net system-wide store count of 1,690.
- Global Products sales up 24%, volume up 9%.The company plans to report third-quarter financial results on August 3, 2022 and host an earnings call at 9 am ET on August 4, 2022.
Valvoline’s financial and legal advisors are Goldman Sachs and Cravath, Swaine & Moore.
Webcast and teleconference
Today at 9 am ET, Valvoline will discuss the deal. The webcast will be available at http://investors.valvoline.com. You can also call +1-844-200-6205, access code 236121. The webcast and supporting materials will be archived after the live event.
The estimates above are the most current information available but do not present all the information needed to understand the company’s results for the three months ended June 30, 2022. Valvoline estimated its preliminary and unaudited results because its financial closing procedures for the three months ended June 30, 2022 are not yet complete. Due to the completion of normal quarter-end accounting procedures and adjustments, including the Company’s internal control over financial reporting, the completion of the preparation and review of the Company’s financial statements for the three months ended June 30, 2022, and the subsequent occurrence or identification of ev Valvoline has no obligation to update or supplement the above information until it releases its third-quarter results on June 30, 2022.
Certain statements in this press release are forward-looking under the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include statements about the proposed transaction, the expected timetable for completing the proposed transaction. The benefits and synergies of the proposed transaction. Future opportunities for the standalone Retail Services company, and any other statements regarding Valvoline’s. Aramco’s future operations, financial or operating results, capital allocation, debt ratio, anticipated business levels, and future earnings. Some of these forward-looking statements have been identified by Valvoline using words like anticipates, believes, expects, estimates, is likely, predicts, projects, forecasts, as well as the negative of these words or other comparable terminology.