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Nutrien plants seed for Actagro
Posted on Wednesday, 06 February 2019 10:40
Colorado-headquartered Nutrien has agreed to acquire the developer, manufacturer and marketer of environmentally sustainable soil and plant health products Actagro for USD 340.00 million.
The buyer, billed as the world’s largest provider of crop inputs and services, is including USD 20.00 million in working capital as part of the consideration and is expecting the transaction to boost earnings in the first year.
Actagro manufactures products from its two US-based facilities in California and Arkansas, which are then distributed to agricultural markets globally and sold through vendors, including Nutrien’s own retail arm.
The group’s main commercial portfolio includes around 30 products that have a strong-track record of increasing crop productivity and financial returns for growers.
Nutrien believes Actagro will generate USD 55.00 million in run-rate earnings before interest, taxes, depreciation and amortisation within two years after closing, with the realisation of certain related synergies and organic growth opportunities.
Completion is subject to US regulatory approvals and is expected during the first half of 2019.
Chuck Magro, chief executive of the acquiror, noted: “The acquisition of Actagro is aligned with Nutrien’s strategy to invest in higher-margin proprietary products that provide strong value for growers.
“Actagro has a strong track record of developing and manufacturing high-value crop nutrition products and we see a significant opportunity to expand the business by leveraging the global reach of our retail network and the expansion of Actagro’s strong relationships with domestic and international distributors.”
He added Nutrien will continue to use its balance sheet and cash flow to allocate capital towards growth opportunities that increase value for both customers and shareholders.
The buyer produces and distributes roughly 26.00 million tonnes of potash, nitrogen and phosphate products around the world.
Shares in the group closed up slightly yesterday, after the announcement was made, to CAD 68.28 (USD 52.03), giving Nutrien a market capitalisation of CAD 41.97 billion.
It is due to announce its fourth quarter and full-year earnings for 2018 later today.
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