Chemtura AgroSolutions Acquired In Billion Dollar Deal

Platform Specialty Products Corp., a global specialty chemicals company, announced today that it has entered into a definitive agreement to acquire Chemtura AgroSolutions (CAS), a fast-growing global provider of agrochemicals and seed treatment products, from Chemtura Corp. for approximately $1 billion, consisting of $950 million in cash, subject to working capital and other adjustments, plus 2 million shares of Platform’s common stock.

CAS is a leading provider of seed treatment and agrochemical products for a wide variety of crop applications in attractive geographies. Its portfolio encompasses seed treatments, insecticides, miticides, herbicides, fungicides, plant growth regulators and adjuvants, and is supported by a proven and robust new product pipeline with over 100 new launches in each of the last three years. These products, backed by extensive research and field testing, utilize advanced formulations to enhance crop quality and yield in many specialty markets and are supported by product registrations in more than 100 countries.

CAS has delivered profitable growth and should be immediately accretive by more than 35% to Platform’s adjusted earnings, pre-synergies. For the year ended December 31, 2013, Chemtura reported net sales for CAS business of approximately $449 million and adjusted EBITDA of $101 million, representing an adjusted EBITDA margin of 22.6%, which is in line with Platform’s margin profile. CAS has demonstrated a strong track record of earnings expansion since the economic downturn, as evidenced by its EBITDA compounded annual growth rate of over 15% from 2009 through 2013, primarily from organic growth.

We believe that CAS’ growth, as well as its cash generative nature, should further strengthen Platform’s overall financial positioning. Similar to Platform’s MacDermid business, CAS requires modest capital investment to maintain its growth trajectory, as typically less than 2% of annual net sales is used for capital expenditures. CAS’ senior leadership team, led by its President, Nelson Gibson, possesses on average, more than 25 years of agricultural experience and will remain with the business.

Platform will pursue a virtual Active Ingredient (“AI”) model, and Platform and Chemtura have entered into a long-term supply agreement where Chemtura will supply key AI’s. Platform will supplement this with select acquisition and licensing of others AI’s to take advantage of CAS’ global registrations and distribution footprint.

Martin E. Franklin, Platform’s Founder and Chairman, said, “When Platform made its initial investment with the acquisition of MacDermid last year, we recognized that the specialty chemicals space was ripe with opportunity for assembling a portfolio of best-in-class companies, and CAS has many of the same attractive business characteristics as MacDermid. CAS’ strong positions in niche markets extend our reach into a new vertical, which possesses robust growth dynamics. This is a successful, fast-growing business with an experienced management team, and the additional resources and guidance from Platform’s executive leadership should provide CAS with an optimal, long-term home for it to truly thrive.”

Daniel H. Leever, Platform’s Chief Executive Officer, commented, “The agrochemicals business perfectly aligns with the key values and characteristics of Platform, and meets Platform’s disciplined acquisition criteria. This transaction demonstrates our ability to execute our clearly-defined growth strategy and provides us with a strong position in an attractive new vertical. Like MacDermid, CAS’ innovation capabilities and highly-skilled technical and service personnel create a unique value proposition. This ‘asset-lite, high-touch’ approach is pivotal to Platform’s business model and facilitates margin expansion, increased profitability, and significant free cash flow generation to support future growth. I look forward to working with Nelson Gibson and his team to identify and invest in initiatives to enhance further growth in the business. I’m delighted with Platform’s progress to date and more excited than ever about our long-term growth potential.”

Topics:

Leave a Reply

Crop Inputs Stories

HerbicidesScouting Key To Next Season’s Soybean Herbicide Program
August 12, 2014
When growing soybeans, growers need to think ahead to stay one step ahead of weeds. That means examining weed threats and evaluating which herbicides work best. Read More
Seed/BiotechSyngenta Delivers Two New Winter Wheat Varieties To Eastern Corn Belt
August 6, 2014
Adding to its portfolio of AgriPro brand wheat varieties, Syngenta introduces SY 007 and SY 474 soft red winter wheat varieties. Read More
Aerial view of the West Fertilizer explosion site
FertilizerFertilizer Companies Blame City For West, TX, Explosion
August 6, 2014
El Dorado Chemical Co. and CF Industries contend the city failed to properly train the first responders and had insufficient protocols in place to battle the April 17, 2013, blaze at West Fertilizer Co. that triggered the explosion. Read More
FungicidesResearchers Target Soybean Disease With Genetic Resistance Study
August 6, 2014
University of Illinois researchers will share new information on controlling sudden death syndrome through genetic resistance at this year's Agronomy Day. Read More

Trending Articles

MAGIE 2014 ShowStopper
EquipmentJohn Deere Again Wins MAGIE ShowStopper Award
August 25, 2014
For the second consecutive year, John Deere was honored at the Midwest AG Industries Exposition (MAGIE) for its new R4045 sprayer. Read More
ManagementExpert To Discuss Farmland Value, Rent At Farm Science Review
August 18, 2014
While cropland values in Ohio increased in the past two years, they have remained flat in 2014, declining in some cases, according to an Ohio State University agricultural economist. Read More
EquipmentAdvance Your Technology IQ At MAGIE
August 13, 2014
The Midwest AG Industries Exposition (August 20-21) is the place you need to be to see, study and evaluate how new advances in the equipment, operations, crop protection and fertility sectors can help your business prosper. Read More
HerbicidesScouting Key To Next Season’s Soybean Herbicide Program
August 12, 2014
When growing soybeans, growers need to think ahead to stay one step ahead of weeds. That means examining weed threats and evaluating which herbicides work best. Read More
StewardshipMichigan Agriculture Leaders On Toledo Water Ban: We Want To Be Part Of The Conversation
August 8, 2014
Leaders of Michigan agricultural organizations said Thursday that the government should not have a “knee-jerk reaction” based on last weekend’s water ban in Toledo due to fertilizer run-off in Lake Erie. Read More
CropLife 100BRANDT Acquires Lemon Ag Services
August 4, 2014
The acquisition of Lemon Ag fits BRANDT’s aggressive corporate strategy of providing superior agronomic advice and services for customers in central Illinois. Read More

Latest News

Seed/BiotechBerendes Joins Verdesian Board Of Directors
September 2, 2014
Verdesian Life Sciences announced that Robert Berendes has recently joined the company's board of directors. Read More
CropLife 100Pinnacle Acquires East Kansas Chemical
September 2, 2014
Ranked 82nd on the CropLife 100, East Kansas Chemical will operate as part of Pinnacle's Performance Agriculture brand. Read More
WebinarsWebinars On Demand
September 2, 2014
Register for one of our upcoming Webinars or access our archive of past Webinars to view recordings of presentations that may be of interest to you. Read More
CropLife 100Pinnacle Launches Performance Agriculture Brand
September 2, 2014
Performance Agriculture complements Pinnacle’s existing brands, including Sanders, the company’s flagship farm input retail brand. Read More
Webinars5 Key Benefits Of Attending A Webinar
September 2, 2014
Webinars can provide ag retailers with a convenient option for gaining knowledge on the latest industry issues and solutions. Read More
Crop InputsBASF Is Betting On A Bright Agricultural Future
September 1, 2014
The crop protection products giant is gearing up for a busy time in agriculture by investing in both product production and development over the next couple of years. Read More
Eric SfiligojAn Erie Feeling For Ag
September 1, 2014
Plenty of water issues have been in the news lately, including the continuing drought in California. Read More
CropLife 100Pinnacle Acquires California-Based Retailer
August 29, 2014
Pinnacle Agriculture Holdings will acquire Kerman Ag Resources, Inc., which will operate under Pinnacle's Performance Agriculture brand. Read More
Allied Cooperative Grain Plant
ManagementArcadia Co-op To Merge With Allied Cooperative
August 28, 2014
Allied Cooperative has announced that members of Arcadia Co-op voted in favor of a merger with Allied Cooperative, paving the way for the consolidation which will be effective on December 1, 2014. Read More
InsecticidesBioinsecticide VENERATE Now Registered In California
August 27, 2014
Marrone Bio Innovations' VENERATE is a new tool to help California growers control crop-damaging insect pests, fight the development of insect resistance and reduce pesticide residues on fruits and vegetables. Read More
CropLife 100Two Iowa-Based Ag Co-ops To Merge
August 27, 2014
The Board of Directors and management of United Western Coop, Missouri Valley, IA has completed a merger with Heartland Co-op, West Des Moines, IA, effective September 1, 2014. Read More
FertilizerKoch Expands AGROTAIN Nitrogen Stabilizer Portfolio
August 26, 2014
Koch Agronomic Services, LLC has added two new innovative nitrogen stabilizers to the AGROTAIN product family – AGROTAIN ADVANCED and AGROTAIN DRI-­MAXX. Read More
Seed/BiotechDuPont To Build Two Seed Treatment Centers
August 26, 2014
DuPont has announced construction on two state-of-the-art centers dedicated to developing and testing seed treatment formulations, applications and seed handling techniques in an important step toward bringing new solutions to growers. Read More
Seed/BiotechLoveland Products Acquires A Controlling Interest In Ag…
August 26, 2014
Loveland Products, a subsidiary of Agrium , has announced the company has acquired a controlling interest in Agricen, a Dallas-area agricultural biotechnology company delivering biochemical-based products for efficient and sustainable plant nutrition. Read More
StewardshipUp Close Look At The 2014 Environmental Respect Award W…
August 25, 2014
The 2014 Environmental Respect Award winners were honored recently at the 24th annual event in Wilmington, DE. Read More
Eric SfiligojAg Science Rejection Carries Consequences
August 25, 2014
As innuendo and fear dog the regulatory process, agriculture can’t get the new tools it needs to combat world hunger. Read More
LegislationFarmers Dismayed As New Farm Bill Dumps Direct Payments
August 25, 2014
The threatened end of cash subsidies to the nation’s row crop farmers dates back through at least the last two iterations of national agriculture policy legislation. Read More
MAGIE 2014 ShowStopper
EquipmentJohn Deere Again Wins MAGIE ShowStopper Award
August 25, 2014
For the second consecutive year, John Deere was honored at the Midwest AG Industries Exposition (MAGIE) for its new R4045 sprayer. Read More