With 3,600 product registrations in more than 100 countries, Arysta offers market-leading insecticides, fungicides, herbicides, biostimulants and value-added nutrients. Its portfolio consists of both agrochemical and biosolutions products, which address the full spectrum of growers' protection and yield enhancement needs. With a "close to the grower" philosophy, Arysta maintains a sales and marketing force of more than 1,300 professionals that possess both technical and local market expertise to create customized, value-added solutions.
Arysta has delivered stable and profitable growth under the Permira funds' ownership. The company reported net sales of $1.5 billion for the full year 2013 and had a particularly strong performance in its key growth regions of Latin America and Africa. High-growth regions such as Latin America, Africa, Central and Eastern Europe, China and South Asia represented over 65% of Arysta's sales in 2013. The proposed Arysta acquisition would have been more than 20% accretive to Platform's 2014 adjusted earnings before synergies.
In line with Platform's "asset-lite, high-touch" business model, Arysta engages in virtually no direct agrochemical active ingredient ("AI") manufacturing and instead sources AIs from more than 100 suppliers to develop highly-specialized formulations and product applications. This flexible supply chain model optimizes Arysta's cost structure and capital requirements as well as enhances its ability to adapt to market changes.
Arysta's President and Chief Executive Officer, Wayne Hewett, is expected to join Platform's senior leadership team as its President and to lead Platform's three agrochemical businesses in cooperation with the strong management teams from Chemtura AgroSolutions ("CAS"), Agriphar, and Arysta. Mr. Hewett has successfully led Arysta since 2009 and previously held various senior management positions during his more than 20-year career at GE.
Upon the completion of the Arysta and CAS transactions, along with Agriphar, which was acquired on October 1, 2014, Platform's agrochemicals offering will include one of the world's most comprehensive lineups of both traditional and non-traditional crop solutions that assist growers in protecting and enhancing crop yields. In total, the business will have an operating footprint in 100+ countries and benefit from a global supply chain that will allow operational efficiencies to become realized almost immediately. The geographical mix of revenue across all of the regions and end-market crop diversification, further enhances the investment characteristics of the business segment. Given the complementary nature of the businesses, Platform expects to realize in excess of $65 million in synergies from the combination of Arysta, CAS, and Agriphar over the next three years.
Martin E. Franklin, Platform's Founder and Chairman, said, "This is a watershed event for Platform. Over the past twelve months we have demonstrated significant progress and exercised tremendous discipline as we executed against our build-up strategy. Through the acquisitions of Arysta, CAS, and Agriphar we have established a leading position within an attractive asset-lite, high-touch specialty chemicals vertical. As we work to accelerate the organic growth within these businesses, we remain opportunistic on the acquisition front and will look to strategically expand our portfolio across other attractive, niche verticals. The management teams we have assembled through our acquisitions provide us with some of the best talent in the industry, and I am confident that by working together, each of our businesses will thrive and create increasing value for our shareholders."
Daniel H. Leever, Platform's Chief Executive Officer, commented, "Bringing Arysta under the Platform umbrella will create a broad agrochemicals offering that is uniquely positioned to provide farmers, globally, with a full suite of products to address their product and geography specific needs. Arysta's focus on creating highly-differentiated, highly-specialized, and highly-localized formulations through extensive development and technical service is in line with CAS' and Agriphar's 'asset-lite, high-touch' business models. All three of these companies possess the expertise and agility necessary to develop solutions that are tailored to an expansive range of crops and global markets and that will drive profitable growth for Platform over the long term. Arysta contains many talented executives that will be joining talent pools at CAS and Agriphar. Our greatest assets are our people and the team evolving under Wayne will be both strong and deep. This transaction will further deepen our bench strength at Platform as a whole. We continue to see many attractive opportunities that meet our strategic and financial criteria."
Wayne Hewett, Arysta's President and Chief Executive Officer, commented, "The strength of Arysta's strategy is evident through the growth we have exhibited in recent years and having Platform as our new home and the benefit of the products and personnel within CAS and Agriphar will provide us with additional resources and talent to accelerate this momentum. With powerful global trends placing increasing demand and new challenges on growers around the world, the product lines and innovation capabilities of Platform's agrochemicals companies will be among the leaders in offering the most comprehensive range of traditional and non-traditional solutions."
John Coyle, a Partner at Permira, said, "This transaction is a testament to the significant transformation Arysta has undergone under Wayne Hewett, his team and our funds' ownership. Since 2008, the Company has consistently grown revenues and considerably increased profits by expanding into high growth markets and focusing on solutions driven products to meet growers' needs around the globe. We are excited that Arysta will benefit from the larger scale of Platform as well as fortify its position within the agriculture industry due to the combination with CAS and Agriphar."
The transaction, which is expected to close in the first quarter of 2015, is expected to be funded through a combination of cash on hand, convertible equity, debt, and equity. The acquisition will not have any impact on Platform's status as a U.S.-domiciled company.
Credit Suisse, Barclays, UBS Investment Bank, and Nomura Securities International Inc. acted as M&A advisors with Greenberg Traurig and Kane Kessler acting as legal advisors to Platform. Barclays, Credit Suisse, UBS Investment Bank, and Nomura Securities International Inc. have committed financing for the acquisition. Morgan Stanley acted as lead financial advisor, J.P. Morgan acted as co-financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal counsel for the Permira funds.
Conference Call InformationPlatform will host a webcast/dial-in conference call to discuss the transaction at 8:00 a.m. Eastern Time on Monday, October 20, 2014. Participants on the call will include Daniel H. Leever, Chief Executive Officer; Frank J. Monteiro, Chief Financial Officer; and Wayne Hewett, President and Chief Executive Officer of Arysta.
To listen to the call by telephone, please dial (855) 357-3116 (domestic) or (484) 365-2867 (international) and provide the conference ID: 23753003. The call will be simultaneously webcast at www.platformspecialtyproducts.com where supplemental slides will also be available for download. A replay of the call and webcast will be available for three weeks shortly after completion of the live call at www.platformspecialtyproducts.com.
For more information:
Platform Specialty Products Corporation
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T: +1 203-575-5850