HC2 Holdings (HCHC) Closes Beyond6 Sale to Mercuria Investments

Zacks Equity Research
·4 min read

HC2 Holdings, Inc. HCHC completed the divestment of its clean energy subsidiary Beyond6, Inc. for $169 million. The other party to the transaction was Mercuria Investments US, Inc. Notably, the divestment deal was announced by HC2 Holdings on Dec 31, 2020.

It is worth noting here that shares of HC2 Holdings have gained 2% in the past two days, ending the trading session at $3.55 yesterday.

Mercuria is one of the leading traders in dry bulk commodities and physical energy products, including refined petroleum products, crude oil, environmental products, petrochemicals, iron ore, natural gas and coal. It operates in more than 50 countries.

Inside the Headlines

Beyond6 is a specialist in providing various energy solutions, mainly those related to decarbonization. It owns and operates multiple CNG stations for use by customers in the transportation industry as well as provides various decarbonization services.

The company comprised HC2 Holdings’ Clean Energy segment. Its revenues were $10.3 million in the third quarter and $31 million in the first nine months of 2020, representing increases from $8.7 million and $19.3 million, respectively, generated in the year-ago comparable period.

Before divestment, HC2 Holdings held a 61% stake in Beyond6 and received cash of $70 million in lieu of this stake post the completion of the sale.

HC2 Holdings noted that the divestment is in sync with its plans to strengthen its capital structure and growth opportunities. Proceeds will help strengthen financial flexibility and lowering debts.

HC2 Holdings’ Other Divestment Actions in 2021

The broadcasting unit of HC2 Holdings, HC2 Broadcasting Holdings, Inc. announced the divestment of four television stations by HC2 Station Group, Inc. on Jan 4, 2021. The sale fetched $35 million to the company.

As noted, the divested stations included KEJR-LD — a television translator (low power) — as well as KMOH-TV Phoenix, KAZD Dallas and KYAZ Houston — television stations (full power). Notably, the translator was used for KMOH-TV.

HC2 Broadcasting still operates five television stations in Houston, six in Dallas and three in Phoenix.

Zacks Rank, Earnings Estimate and Price Trend

HC2 Holdings presently carries a Zacks Rank #2 (Buy). Efforts to boost growth opportunities, inorganic activities, reduce corporate expenses and strengthen the balance sheet are likely to aid the company, going forward.

In the past three months, the company’s shares have gained 55% compared with the industry’s growth of 12.9%.






The Zacks Consensus Estimate for HC2 Holdings’ bottom line is pegged at a loss of 22 cents per share for the first quarter of 2021 and a loss of 60 cents for 2021. Notably, the 60-day-ago consensus estimate was pegged at a loss of 36 cents for the first quarter and a loss of 98 cents for 2021.

Other Stocks to Consider

Three other top-ranked stocks in the industry are General Electric Company GE, 3M Company MMM and Danaher Corporation DHR. While General Electric currently sports a Zacks Rank #1 (Strong Buy), both 3M and Danaher carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 30 days, current-year earnings estimates for 3M and Danaher have moved north, while that for General Electric has been unchanged. Further, the earnings surprise for the last reported quarter was 200% for General Electric, 7.05% for 3M and 25.55% for Danaher.

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