Compass Minerals acquires full ownership Brazilian plant nutrition company

Compass Minerals acquires full ownership of Brazilian plant nutrition company

11:47 AM, 17th August 2016
Compass Minerals acquires full ownership of Brazilian plant nutrition company

OVERLAND PARK, US: Compass Minerals has entered into an agreement to purchase all outstanding interest in Produquimica Industria e Comercio SA (Produquimica), one of Brazil’s leading manufacturers and distributors of speciality plant nutrients. Compass Minerals previously owned a 35 percent equity stake in the company, which it acquired in December 2015.

Compass Minerals expects to close the transaction in early October 2016.

The expected price for the remaining 65 percent of equity is approx $310 million to $330 million, is based on Produquimica’s expected 2016 performance. In addition, Compass Minerals will assume approximately $150 million in $ equivalent long-term debt, most of which will be retired during the fourth quarter. The acquisition includes approximately $150 million of net working capital.

Compass Minerals expects the transaction to add $0.12 to $0.15 to full-year 2016 diluted earnings per share.

Based in Sao Paulo, Brazil, Produquimica generated approximately R$1.2 billion in net revenue and R$198 million in EBITDA as of the 12 months ending June 2016. Produquimica operates two primary businesses – agricultural productivity and chemical solutions. The agricultural productivity division manufactures and distributes a broad offering of speciality plant nutrition solution-based products.

These include micronutrients, controlled release fertilisers, and other speciality supplements that are used in direct soil and foliar applications, as well as through irrigation systems and for seed treatment. Many of these products are developed through Produquimica’s robust research and development capabilities. Produquimica also manufactures and markets speciality chemicals, primarily for the water treatment industry and for use in other industrial processes in Brazil.

“This accretive acquisition gives us access to higher growth markets and geographic diversification of our earnings. Produquimica’s strong history of growth and product development in Brazil provides Compass Minerals an excellent platform for expansion in one of the world’s most important agriculture markets,” said Fran Malecha, Compass Minerals president and CEO.

“All of us at Produquimica are excited about the opportunities that our customers and employees will have as part of Compass Minerals. We look forward to growing with Compass Minerals in Brazil’s speciality plant nutrition market and beyond,” said Gerhard Schultz, president of Produquimica.

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