UPL acquires Arysta in a $4.2-bn all-cash deal
21 July 2018
UPL Corporation Ltd, the international arm of India's largest generic agro-chemical company UPL Ltd (former United Phosphorus Ltd), has acquired Arysta LifeScience for $4.2 billion in an all-cash deal, a move that will further enhance its position as a leading crop protection firm in the world.
Following the deal, UPL will have $5 billion in combined sales and $1 billion in EBITDA.
UPL is acquiring Arysta LifeScience — a global provider of crop protection solutions, including BioSolutions and seed treatment — and its subsidiaries from NYSE-listed Platform Specialty Products Corp.
The 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, a leading global alternative asset firm. Both the companies will invest $600 million each for a combined stake of about 22 per cent in UPL Corp.
This acquisition will create a “New UPL” and fulfills UPL’s objective of creating an integrated patent and post-patent agricultural solutions business with a global footprint.
“The acquisition of Arysta is a transformational transaction for UPL. Arysta has a differentiated position in the crop protection market given its focus primarily on specialty 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,” Jai Shroff, group chief executive officer and executive director of UPL, said.
“This transaction is a “perfect match" with powerful synergies across geographies, crops and products, strengthened through best-in-class manufacturing and differentiated R&D capabilities,” he added.
To finance the investment, UPL Corp intends to use a combination of newly-issued equity and debt.
UPL Corp has received debt financing commitments of $3 billion for the balance of the consideration, with bullet maturity of 5 years, from MUFG Bank and Coöperatieve Rabobank UA (Hong Kong Branch).
Rakesh Sachdev, CEO of Platform, said, “This new company is positioned to provide deep and wide local customer solutions and selling presences for broad acre and niche crops and markets, and a leading bio-solutions business. 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.”
UPL expects the acquisition to be EPS accretive by Rs 10-12 per share in FY 2020. The acquisition is subject to customary conditions, including the receipt of required regulatory approvals, and is expected to be completed in late CY 2018 or early CY 2019.