Platform Confirms Arysta Sale to UPL, to Change Name

  • Platform has signed a definitive agreement to sell Arysta LifeScience Inc. to UPL Corporation Ltd. for $4.2 billion in cash, subject to customary closing adjustments
  • Closing expected in late 2018 or early 2019, subject to regulatory approvals and other customary closing conditions

In a confirmation of earlier reports, Platform Specialty Products Corp. said on July 20 it will sell its Arysta LifeScience Inc. business to India’s UPL Corp. Ltd. for $4.2 billion in cash.

The agreement values Arysta on a debt free, cash-free basis and is subject to customary working capital and other adjustments.

“This transaction represents the achievement of Platform’s objective of separating its Agricultural Solutions and Performance Solutions businesses, while establishing a pre-eminent global off-patent crop protection business. UPL is a global leader in the crop protection market, and this combination would form one of the largest crop protection companies in the world with an integrated, efficient supply chain, formulation expertise and global distribution capability,” according to Platform’s statement.

Jai Shroff, CEO, UPL; photo credit Jake Naughton

Jai Shroff, Group Chief Executive Officer and Executive Director of UPL Limited, the parent company of UPL, said, “The acquisition of Arysta is a transformational transaction for UPL. Arysta has a differentiated position in the crop protection market given its focus primarily on specialty applications and tailored local solutions. This is in line with our long-term vision of becoming a premier global provider of agricultural solutions designed to secure the world’s long-term food supply. This transaction is a “perfect match” with powerful synergies across geographies, crops and products, strengthened through best-in-class manufacturing and differentiated R&D capabilities. We are bringing together two winning teams with strong values and successful track records to create a strong platform for our mission of ‘Farmer First’ and sustainable growth. New UPL will focus on making agriculture more sustainable and farmers more resilient to impact of climate change and is committed to speeding progress towards the UN’s 2030 sustainable development goals.”

Platform’s Chief Executive Officer Rakesh Sachdev said, “The combination of Arysta and UPL, two remarkably complementary companies, will create a new paradigm in the crop protection market with an efficient supply chain and formulation innovation capabilities. This new company is positioned to provide strong local customer solutions around the world with selling presences for broad acre and niche crops, supplemented by a leading bio-solutions business.  With its scale and capabilities, we believe the combined companies will represent a compelling value proposition for growers, distributors, suppliers and innovation partners in a consolidating market.”

Sachdev continued, “Arysta grew and matured immensely during our period of ownership through acquisitions, integrations and investment. This is a terrific company with robust global sales and innovation capabilities, proven products, and world-class talent.  We are thankful for what Arysta accomplished during its time as a part of Platform and for the efforts of its team around the world.”

The closing of this transaction will also mark the culmination of a separation process announced by Platform in August 2017.

Martin E. Franklin, Chairman of Platform, commented, “We decided to separate our businesses last year in order to position both the Performance Solutions and Agricultural Solutions businesses for future growth and additional compelling value creation opportunities.  This transaction with UPL creates an agricultural chemicals powerhouse with highly complementary capabilities. The future is bright for these businesses, and we are excited to see what the two combined companies can accomplish.”

A New Chapter for Platform

The closing of this transaction will start a new phase for Platform. Consistent with this transformation, Platform plans to change its name to Element Solutions Inc., effective at closing of the Arysta transaction. Element expects to be traded on the New York Stock Exchange under the ticker symbol “NYSE:ESI.”  This newly named company will comprise the existing Performance Solutions segment of Platform, a portfolio of market-leading specialty chemicals businesses focused on attractive segments in the electronics, industrials and energy end-markets.  Element intends to continue to focus on organic growth from its core portfolio as well as measured opportunistic acquisitions to build its capabilities, technologies and product offerings in its existing and adjacent end-markets.

Use of Proceeds and Pro Forma Financial Outlook

Platform expects net cash proceeds of approximately $4.2 billion from the sale of Arysta, which Element plans to use primarily to pay down existing debt.  At the closing of the Arysta transaction, Element expects to have net debt of less than $1 billion or less than 2.5 times pro forma trailing twelve month adjusted EBITDA.  Element’s new long-term net leverage target range would be 3.0 to 3.5 times adjusted EBITDA, which provides significant incremental capacity for value accretive capital allocation, including a combination of measured acquisitions and share repurchases.  To that extent, the Board has authorized up to $750 million in share repurchases, conditioned on the closing of the Arysta transaction. Shares repurchases will be made opportunistically at the discretion of Element.

In the context of the Arysta transaction and the formation of Element Solutions, Platform intends to merge its corporate functions with those of its Performance Solutions segment.  The divestiture of Arysta and this related reorganization are expected to generate approximately $25 million of estimated annual run-rate cost savings in the next 12 to 18 months. Based on Platform’s previously-announced 2018 adjusted EBITDA guidance1 and adjusting for the Arysta transaction as well as the annualized cost savings from the related reorganization, Element expects pro forma adjusted EBITDA from continuing operations to be in a range of $450 million to $470 million on an annualized basis.  Going forward, Elements Solutions expects to be positioned to grow adjusted EBITDA in the high-single digits annually.

 

Topics: , ,

Leave a Reply

Agrichemicals

Adjuvants

Clariant, Eastman Enter Distribution Agreement

Clariant, a world leader in specialty chemicals, and Eastman Chemical Company, a global advanced materials and specialty additives company, announced

Agrichemicals

What Does a Traceability Software Product Do in Agribusiness?

Editor’s note: This article was originally published on LinkedIn. I’ve been traveling over the last one week, on-boarding our first large

Agrichemicals

University of Utah Recognizes Aqua-Yield/Nano Institute Partnership in New Annual Report

In a newly-published annual report, the University of Utah’s Center for Technology & Venture Commercialization (TVC) touts the first-of-its-kind collaboration

Corn closeup
Herbicides

Bayer Posts More Than 300 Glyphosate Safety Studies Online

Today, Bayer marks the first anniversary of its Transparency Initiative, designed to enhance trust in the science behind crop protection

Agrichemicals

UPL Mauritius to Acquire Bioquim Group

UPL Mauritius, a subsidiary of UPL, India is set to acquire 100% shares of Bioquim Group which includes companies based

Parry-lab
Agrichemicals

Crop Protection: How to Lead Innovation in R&D Teams (Part 5)

Editor’s note: This is the fifth of seven articles in a series on Strategic R&D Management in AgChem and BioScience

Aphids Cotton
Agrichemicals

Nichino America Gets EPA Approval for Insecticide

PQZ insecticide from Nichino America, Inc. has been granted a U.S. EPA label expansion for food crop use, the company

Agrichemicals

Crystal Crop Protection Acquires Three Syngenta Brands

New Delhi-headquartered Crystal Crop Protection, a firm backed by private equity firm Everstone Capital, has acquired three insecticide and fungicide

Agrichemicals

Bayer to Offer Access to Glyphosate Studies

Bayer will soon include safety study summaries of glyphosate on its dedicated transparency platform. This next step will mark the first

Agrichemicals

What to Expect for U.S. Dicamba Use in 2019

Long-awaited news from U.S. Environmental Protection Agency on its decision to extend the registration for the new dicamba technologies arrived Halloween

Agrichemicals

Bayer: Study Shows its Soybeans Reduce Environmental Impact

Results from a five-year peer-reviewed study on Intacta RR2 PRO™ soybeans planted in South America were recently published, indicating that

Jay-Vroom-Covers-featured-image
Agrichemicals

A Salute to Retired CropLife America President Jay Vroom

Editor’s note: It goes without saying that crop protection manufacturing is a central point of interest to readers of this

US-China-Trade-War
Agrichemicals

Expect Herbicide Price Hikes in 2019

Herbicide price hikes across the board are an inevitability for 2019, as the entire U.S. ag community deals with a

Agrichemicals

Corteva to Launch New Fungicide, Starting in Asia Pacific

Corteva Agriscience announced Adavelt active as the new brand name for a novel fungicide that will offer farmers curative and

wheat-field
Agrichemicals

Albaugh Discusses 2018 Trials of CoAXium Wheat System

Albaugh announced that the CoAXium Wheat Production System driven by Aggressor herbicide exceeded expectations in 2018 performance evaluation trials, demonstrating

Agrichemicals

FMC Launches Insecticide/Fungicide

FMC Corp. has launched Ethos 3D insecticide/fungicide, formulated specifically for the novel 3RIVE 3D in-furrow application system that converts traditional

Corn-field
Herbicides

The U.S. Battle over Glyphosate Has ‘Old World’ Roots

Although it’s been in use since 1974, glyphosate has come under intense attack here in the U.S. just recently, writes

Kenya-Agriculture
Africa/Middle East

Kenya’s Crop Protection Industry Fears ‘Dire Consequences’ of New Pesticides Tax

The agrichemcials industry in Kenya is up in arms over a decision by the government to impose a 16% value-added

Agrichemicals

U.S. EPA Renews Dicamba Label, with New Restrictions

Long-awaited news from U.S. EPA came on the evening of Oct. 31 that it has decided to renew the label

Latest News

Asia

India: Enabling Modern Agriculture Through IoT

Since the first green revolution in the 1960s that radically transformed the face of Indian agriculture, the sector has consistently

Asia

Reuters: Trump Greenlights Next Round of Farm Payments in China Trade War

The Trump administration will move forward with plans to distribute a second round of payments to farmers caught in the

Markets

AgriBusinessGlobal.com: Top 10 Stories from 2018

What a year it’s been for the global agribusiness industry. While the mergers and acquisitions once again dominated headlines in

Trade Summit

Three Things We Learned at Trade Summit Southeast Asia

Since 2006 AgriBusiness Global™ (ABG) has hosted Trade Summits in all corners of the world in an effort to empower

Asia

AgFunder Releases India AgriFood Startup Investing Report

AgFunder has released the inaugural India AgriFood Startup Investing Report in collaboration with its report partner Omnivore. In this five-year