UPL snaps up American firm Arysta for $4.2 billion
Mumbai: UPL (earlier known as United Phosphates) on Friday announced the acquisition of Arysta Life Science Inc for $4.2 billion, which will enhance its position as a global leader in agriculture solutions market and will make it a $5 billion entity in combined sales.
UPL vice-chairman Vikram Shroff said the all-cash deal agreement is between UPL Corporation, the international arm of UPL, and the NYSE-listed Platform Specialty Products Corporation to acquire Arysta Life Science Inc and its subsidiaries. Arysta Life Science is a global provider of innovative crop protection solutions, including bio solutions and seed treatment.
For the all-cash $4.2 billion deal, UPL has partnered with a subsidiary of the Abu Dhabi Investment Authority and TPG Capital.
He further said acquisition will help UPL log a $1 billion pre-tax profit and over 20 per cent operating margin due to the synergies between the two companies in terms of geographies, crops and products, manufacturing and differentiated R&D capabilities.
"The acquisition is expected to drive annual synergies of over $200 million," Shroff said.
Transaction provides a compelling value proposition and underscores UPL's "farmer first" mission to continue the transformation of UPL into a leading crop solutions company, he said in a statement.
"Transaction is backed by a $1.2 billion equity investment in UPL Corp from long-term investors including a wholly-owned subsidiary of the Abu Dhabi Investment Authority and TPG Capital. Both these partners will invest $600 million each and pick up a combined stake of 22 per cent in UPL Corp," he added.
The acquisition is expected to fulfil the company's objective of creating an integrated patent and post-patent agricultural solutions business with a global footprint.
Apart from giving UPL access to a differentiated product portfolio, the acquisition will make UPL one of the world's largest global crop protection companies. Jai Shroff, group CEO and executive director, said, "Arysta has a differentiated position in the crop protection market given its focus primarily on speciality 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."
"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, Rakesh Sachdev, chief executive of Platform, said.