Platform acquires Chemtura's pesticides business for $1 billion
12:37 PM MDT | April 21, 2014 | Francinia Protti-Alvarez
Platform Specialty Products (PSP; Waterbury, CT) has entered into a definitive agreement to acquire Chemtura's pesticides business for $1 billion. The price consists of $950 million in cash plus 2 million shares of PSP's common stock, PSP announced today. Closing is planned for the second half of 2014 and is subject to customary conditions and regulatory approvals.
Chemtura's pesticides business reported net sales of approximately $449 million and adjusted Ebitda of $101 million. The business provides seed treatment and pesticides products for a wide variety of crop applications. The business's portfolio encompasses seed treatments, insecticides, miticides, herbicides, fungicides, plant growth regulators, and adjuvants.
"When Platform made its initial investment with the acquisition of MacDermid last year, we recognized that the specialty chemicals space was ripe with opportunity for assembling a portfolio of best-in-class companies, and [Chemtura's agrochemicals] business has many of the same attractive business characteristics. [Its] strong positions in niche markets extend our reach into a new vertical, which possesses robust growth dynamics," says Martin Franklin, founder and chairman of PSP.
Chemtura says that after the sale its core platform will be focused around industrial performance products (IPP), which includes petroleum additives and urethanes and industrial engineered products (IEP), which consists of flame retardants and brominated products and organometallics. The businesses generated approximately $1.8 billion in pro forma net sales and $200 million of adjusted Ebitda, Chemtura says.
"The sale ... furthers Chemtura's transformation into a focused, pure-play industrial specialty chemical company," says Craig Rogerson,chairman and CEO of Chemtura. "We are excited about the prospects of our industry-leading platforms, including IPP, which increased revenues by 10% and adjusted Ebitda by 9% in 2013, and IEP, which has a proven track record and a strategy to drive revenue, price, and cost improvements as 2014 progresses. We are confident that these leading, global platforms can deliver growth from secular opportunities going forward and benefit from cyclical recovery as it occurs."
Platform Acquisition Holding acquired MacDermid (Denver), a specialty chemical maker, in October last year and renamed the business PSP. The company began trading on the New York Stock Exchange in January this year, as reported by CW.
Barclays and Lazard acted as financial advisors, and Greenberg Traurig acted as legal advisor to PSP on the transaction. Barclays has committed financing for the acquisition. Morgan Stanley acted as financial advisor, and Debevoise & Plimpton acted as legal counsel for Chemtura.