Makhteshim Acquires Albaugh

The world’s largest generic crop protection product manufacturer, Makhteshim Agan Industries (MAI), will buy Iowa, US-based Albaugh, which also produces generic agrochemicals for $1 billion, according to an MAI press release. Albaugh is a leading generics producer in the US, Mexico, Argentina and Brazil.

Yesterday, MAI signed a letter of intent to pay $340 million in cash, $455 million in seven-year promissory notes and $59 million of its own shares equivalent to a 12% stake worth $211 million. The deal has been approved by the boards of both companies. MAI — a subsidiary of Koor Industries, which is part of Nochi Dankner’s IDB Holding — had sales of $2.2 billion in 2009. The combined company will have the potential to realize $50 million to $60 million in synergies, said MAI, which cited key benefits of the transaction as: penetration into North American markets; market-leading, low-cost operations in Latin America with existing sales and distribution relationships; significant product cross-selling opportunities; improved production capabilities in major and growing molecules; and improved cost structure of active ingredients and products markets.

The deal is expected to close in the fourth quarter 2010, subject to the completion of due diligence and regulatory approvals in the US, Europe and other countries. MAI expects the acquisition to be profitable within a year of closing, on a non-GAAP basis.
 

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