Indian chemical manufacturer UPL has raised the financial backing for an all-cash deal to become what’s expected to be the world’s fifth biggest crop chemical firm.
UPL on July 20 announced it will pay $4.2 billion to buy 100 per cent of Arysta LifeScience — the maker of Everest and Inferno herbicides, among other products — from Florida-based chemical firm Platform Specialty Products Corp. (all figures US$).
UPL CEO Jai Shroff described the deal as “transformational” for the company, whose registrations in Canada include Weevilcide fumigant, Broadloom and Tricor herbicides, Perm-Up insecticide and Elixir fungicide.
UPL said it expects annual synergies of over $200 million from the combination, which it hopes to close in late fiscal 2018 or early 2019, pending regulatory approvals.
Mumbai-based UPL also said it expects the deal to accrue earnings per share (EPS) of 10-12 rupees (19-23 Canadian cents) in the 2020 fiscal year.
The companies said the deal will create what they described as a “New UPL” which “fulfills UPL’s objective of creating an integrated patent and post-patent agricultural solutions business with a global footprint.”
The new company, Platform said in its release, “will be in the position to provide growers with complete, competitive and differentiated solutions, thereby becoming a ‘one-stop-shop’ supplier to customers in key agricultural markets.”
Arysta president Diego Lopez Casanello described the two businesses as “greatly complementary,” and said the “scale and capabilities of the new company will generate significant value for growers, distributors and innovation partners.”
Arysta was formed in 2001 from the life sciences and ag chem assets of Tomen Corp. and Nichimen Corp., after which the ag chem business was rebranded under the name Arvesta. The combined assets went to Permira, an international private-equity firm, in 2008.
Platform bought Arysta from Permira in 2015 for $3.5 billion and merged its operations with two other ag chem firms it owned, Agriphar Group and Chemtura AgroSolutions.
Arysta’s brand portfolio in the Canadian market today also includes Rancona and Vitaflo seed treatments, Kasumin bactericide and fungicides such as Maestro and Elevate, among others.
UPL said its $4.2 billion play for Arysta will be financed by equity investments of $600 million each from Abu Dhabi Investment Authority (ADIA) and “alternative asset” firm TPG.
The investments will give a 22 per cent stake in UPL to a joint ADIA/TPG subsidiary. UPL said it has debt financing commitments in place for the balance of its bid. –– Glacier FarmMedia NetworkTagged ADIA, Arysta, Everest, fungicide, herbicide, Inferno, insecticide, Platform Specialty Products, TPG, UPL, Weevilcide