Hebei Lansheng Biotech Co., Ltd.
Beijing Multigrass Formulation Co., Ltd.

Croda International to acquire Plant Impactqrcode

Feb. 20, 2018

Favorites Print
Feb. 20, 2018

Croda International to acquire Plant Impact

Croda International, the specialty chemicals maker which failed in a $12bn tie-up with rival Ashland Global Holdings, has settled for a smaller deal - the $14m takeover of crop enhancement group Plant Impact.

Shares in Plant Impact soared 75% to 10.25p in morning deals in London, after it revealed an agreed cash takeover by Croda for £10m ($14.1m), equivalent to 10.57p per share.

The deal comes a week after Croda - which produces ingredients for products ranging from anti-wrinkle creams to food additives to wooden floor coatings, and numbers L'Oréal and Procter & Gamble among major customers - was revealed to have held talks with US rival Ashland over a deal.

The talks, reported to have lasted until last month, represented the latest chapter in a series of activity in the chemicals sector, marked in particular by last year's merger of Dow Chemical and DuPont.

Agrichemicals have seen a particular tie-up spree, with the likes of ChemChina's acquisition of Syngenta, Bayer's takeover of Monsanto besides the Dow-DuPont tie-up which will see the spin-off of a new ag sector giant.

Mergers have been spurred by the dent to margins from a downturn in demand from farmers, whose profits have in turn been depressed by soft agricultural commodity prices.

Indeed, Plant Impact was forced to seek a deal after the failure of a supply contract with Bayer, following "difficult trading developments in Brazil".

Contract breach

The UK-based group - whose products aim to enhanced yield through the likes of boosting flowering or promoting plant resistance to pests - said that it had considered a range of options after Bayer said that it "could no longer meet its commitments" in a deal for taking Plant Impact's flagship Veritas product.

The failure cut to £6m, from £13m, Plant Impact's forecast revenues for 2018, and left the group needing to raise additional capital to fund its business plan.

After noting a "low level of support" from shareholders for an equity fund-raise, and deeming offers received for individual assets as "significantly" too low, Plant impact said it had opted for a takeover by Croda, which has a stockmarket value of £5.7bn, and is indeed a member of the FTSE 100 index of leading London-listed companies.

'Fulfil the promise'

David Jones, the Plant Impact chairman, said that the group "has concluded that the best interests of the shareholders are served by selling the company now whilst it remains able to support its trading activities from its remaining cash reserves.

"Furthermore, the board believes that Croda's plan for Plant Impact and Croda's current expertise and market position in agricultural chemistry is a firm basis for Plant Impact to fulfil the promise that we have consistently described for it."

For Croda, chief executive Steve Foots said that the purchase of Plant Impact came with "high quality, novel technology that further expands our position in the crop care sector, and supports our strategy of investing in high growth markets and world leading technologies.

"Plant Impact has assembled a great team, and we're really excited by the prospect of working with them to accelerate development of this business."

Staff implications

Indeed, while Mr Jones and two other Plant impact executives will lose their directorships on the deal's completion, Croda signalled limited prospects for redundancies from the deal, saying that "Plant Impact's employees will be a key factor in maximising the opportunities that the offer will present".

Croda will "aim to retain the best talent in Plant Impact", a statement on Friday said.

"Overall, Croda's intention is to grow the Plant Impact business post acquisition and the skills of employees will be key to achieving this."

The deal will see Plant Impact retain its headquarters at the Rothamsted, the high profile UK crop research centre.

Croda, which bought Dutch-based seed care business Incotec three years ago, said that it "already has a strong position in the broader sector on a global basis through the crop care section of its life sciences sector, which supplies chemistry and services that help protect crops and improve the delivery of actives, allowing farmers to realise higher yields".

Plant Impact shares, which peaked at the equivalent of 73p in 2006, soon after the company was floated, stood at 21.5p before the Bayer deal failure was revealed in December.
Source: Croda

Picture 0/1200

More from AgroNews


2020 Biologicals Special 2020 Latin America Focus
2020 Formulation & Adjuvant Technology Annual Review 2019
Chinese issue of Annual Review 2019 2019 CRO & CRAO Manual
I wanna post a press Comment


Subscribe Email: *
Mobile Number:  


Picture 0/1200

Subscribe to daily email alerts of AgroNews.