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

Agrichemicals

Atticus Adds Depth with New Staff Members

Atticus welcomes six new members to its growing team of talent.

Agrichemicals

Is India a Future Manufacturing Hub for Agrichemicals?

The changing scenario in global trade has made a significant impact on agrichemical business in India. Although the country is

Vive-crop-protection-products
Agrichemicals

Vive Introduces Five New Crop Protection Products for 2019 Season

Five new fertilizer-compatible products are expected to be available from Vive Crop Protection for U.S. corn, sugarbeet, and potato growers

Adjuvants

Vive Announces Five Crop Protection Products for 2019

New nanotechnology-enabled products provide proven insect or disease control.

Rice Field
Insecticides

Belchim Crop Protection USA to Distribute Tenchu Insecticide

Belchim Crop Protection USA has announced it will be distributing Tenchu 20SG (active ingredient dinotefuran), a leading insecticide to protect

corn-field-close-up
Fungicides

Syngenta Receives EPA Registration for New Fungicide Seed Treatment for Corn

Vibrance Cinco fungicide seed treatment from Syngenta has received registration approval from the U.S. EPA for use on corn to

Platform-Graphic-5
Agrichemicals

Defining the #Agritech Platform Stack

Editor’s note: This article was originally published on LinkedIn. Many moons ago, the legendary investor Paul Graham fired off a

Agrichemicals

The Verdict on Dicamba (So Far) in 2018

Does 605 official dicamba-related injury investigations and/or approximately 1.1 million acres of dicamba-injured soybean constitute a problem for U.S. agriculture?

Asia

Crop Protection Key to Doubling Indian Grower Income – Report

Despite all its achievements, Indian agriculture is still grappling with challenges like high monsoon dependency, unpredictable weather patterns, reduction in arable land, low per hectare yield, and lower farmer incomes.

Agrichemicals

Hemani Industries Launches Branded Formulation Division

Hemani Industries Limited, serving international agrichemical customers for more than three decades, has launched its branded formulation division to serve

Agrichemicals

Considering Cuba: Opportunities and Challenges for Ag Input Suppliers

As Cuba attempts to boost its production of food products for domestic consumption, it is expected to gradually increase use and import of chemical inputs.

Adjuvants

Exosect Grants Monsanto License for Formulation Product

UK-based Exosect Ltd. announced it has granted Monsanto Company a license to use its Entostat technology for the delivery of select agricultural biologicals as seed treatments.

Herbicides

HELM Agro US Acquires BASF Herbicide

HELM Agro US, Inc. has signed an agreement to acquire EXTREME herbicide from BASF Corp. EXTREME provides excellent burndown and

India-crop-protection-application
Agrichemicals

UPL to Acquire Arysta for Over $4 Billion

Deal Street Asia said the deal could be announced as early as this week.

Agrichemicals

India’s Crystal Crop Protection Launches Seven Products

Crystal Crop Protection launches new herbicides, fungicides, and insecticides in India.

Adjuvants

Sapec Agro Business Enters Adjuvant Sector with SDP Acquisition

Sapec Agro Business has announced the acquisition of French company SDP, through its subsidiary Tradecorp. The acquisition of SDP, which

ChemChina
Agrichemicals

ChemChina, Sinochem Merger Imminent

Merger believed to be one of the Chinese government’s conditions for its support of ChemChina’s $49 billion takeover of Swiss agrichemicals giant Syngenta AG.

Agrichemicals

AMVAC Names Eilers Managing Director

Eilers will be responsible for AMVAC’s international business.

Agrichemicals

Atticus Snaps Up Tacoma Ag, Expands Generics Portfolio

This strategic acquisition complements and expands Atticus’ product offerings, particularly in the herbicide category.

Latest News

Agrichemicals

Atticus Adds Depth with New Staff Members

Atticus welcomes six new members to its growing team of talent.

Agrichemicals

Is India a Future Manufacturing Hub for Agrichemicals?

The changing scenario in global trade has made a significant impact on agrichemical business in India. Although the country is

Micronutrients

Plant Health: Demand-Driven Fertilization and Its Big Potential

Efficient fertilizer use and optimized plant nutrition have never been more urgent in a world of ever-growing food demand and

Asia

India’s Hemani Industries Forges New Partnerships

“I think customers are tired of having so much inconsistency in supply. There’s a mystery of what’s going to be available and what’s not, so they want to go into a partnership so they’re assured of supplies, and hopefully, prices.”