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Compass Minerals to acquire stake in Produquimica of Brazil
Dec. 21, 2015
Compass Minerals
United StatesFollow
United StatesCompass Minerals has signed a definitive agreement to purchase a 35 percent stake in Produquimica Industria e Comercio S.A. (Produquimica), one of Brazil’s leading manufacturers and distributors of specialty plant nutrients. The all-cash transaction valued at approximately R$450 million (US$120.7 million) is subject to customary post-closing adjustments. This agreement also includes a path to full ownership by early 2019.
Based in São Paulo, Brazil, Produquimica is expected to generate approximately R$1 billion in revenue in 2015 through two primary businesses – agricultural productivity and chemical solutions. The agricultural productivity division manufactures and distributes a broad offering of specialty plant nutrition solution-based products. These include micronutrients, controlled release fertilizers, and other specialty supplements that are used in direct soil and foliar applications, as well as through irrigation systems and for seed treatment. Produquimica also manufactures and markets specialty chemicals, primarily for the water treatment industry and use in other industrial processes in Brazil.
“We are pleased to partner with Compass Minerals in Brazil’s specialty plant nutrition and chemical market,” said Gerhard Schultz, President of Produquimica. “This investment from a strong, U.S.-based company allows us to accelerate our growth initiatives and benefit from the exchange of knowledge between our two companies.”
“We are excited to enter one of the world’s largest and most important agricultural markets with Produquimica,” said Fran Malecha, Compass Minerals president and CEO.
Compass Minerals expects to close the transaction by the end of 2015, and upon closing.
Produquimica At-A-Glance
- Headquartered in São Paulo, Brazil with eight manufacturing facilities throughout Brazil
- Approximately 1,400 employees
- 2015 estimated net revenue = R$1 billion
- 2015 estimated EBITDA = R$180 million
- To assist with funding this investment, Compass Minerals and certain of its subsidiaries have entered into a $100 million incremental term loan as part of an amendment to its existing senior secured credit facility. The incremental loan is coterminous to the existing term loan maturing in 2017 and carries an interest rate of LIBOR plus 1.75 percent.
Source: Compass Minerals
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