Benchmark Reaffirms Bullish Outlook on SunCoke Energy Amid Acquisition News

On May 29, benchmark analyst Nathan P. Martin reaffirmed SunCoke Energy, Inc.’s (NYSE:SXC) Buy rating, with a price target of $13.

Benchmark Reaffirms Bullish Outlook on SunCoke Energy Amid Acquisition News

SunCoke Energy has announced the final agreement to pay $325 million, cash-free and debt-free, for Phoenix Global, a privately held service supplier to large steel producers. SunCoke’s present cash position and an anticipated $230 million draw from its $350 million revolving credit facility will likely be used to finance the deal, which is expected to be finished in the second half of this year. Martin estimates that SunCoke Energy’s pro-forma gross debt will stay at 2.6 times, below the company’s long-term goal of 3.0 times.

Additionally, the analyst noted that SunCoke’s profitability will likely increase immediately as a result of the transaction. Moreover, the deal is expected to produce $5–10 million in synergies annually, which are not included in the company’s pro-forma adjusted EBITDA target of $279 million.

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