Permira exits Japan's Arysta LifeScience to US strategic for $3.5b

Arysta - which makes insecticides, weed killers and plant-nutrition products - was formed in 2001 when the life-sciences divisions of Japan's Tomen Corp. and trading company Nichimen Corp, owned by Sojitz Holdings Corp, combined.

Permira acquired the company from Olympus Capital in 2007 for around $2.2 billion and moved its headquarters to Dublin from Tokyo last year, taking advantage of Ireland's low corporate tax rates.

The trade sale exit comes a month after Arysta filed for a US IPO with a view to raising as much as $500 million in an offering that was expected to value the company at around $4 billion.

The company's consolidated sales reached $1.5 billion in 2013, up from $1.46 billion the previous year. However, Arysta posted a net loss of $93.4 million for 2013 - compared to a $152 million loss in 2012 - as interest and other financial expenses continued to eat away at its bottom line.

PSP - which was reported to be in talks with Permira earlier this month - plans to combine Arysta with previously acquired companies Agriphar and Chemtura Crop Solutions. According to a release, the combined entity, to be led by current Arysta CEO Wayne Hewett, will operate as a vertically-integrated agricultural chemicals company with sales of about $2.1 billion.

"There are immediate benefits to joining forces with Agriphar and Chemtura," said Hewett. "We will be able to offer customers a full complement of biosolutions, crop protection, and seed treatment products. We also will strengthen our global footprint in key geographic areas such as Western Europe and North America."

According to consultancy Phillips McDougall, the global agrochemical market was worth $54 billion in 2013, having posted compound annual growth of 6.8% since 2003. Key market categories include herbicides, insecticides and fungicides.

The transaction, which is still subject to regulatory approval, is expected to close in the first quarter of 2015. London-headquartered Permira now only has one active investment in Japan: sushi chain Akindo Sushiro, which it acquired from Unison Capital in 2012 for $1 billion.

In June, Permira reached a final close on its fifth global buyout fund, Permira V, at the hard cap of EUR5.3 billion ($7.2 billion). The new fund will follow the firm's long-term investment strategy of backing market-leading businesses with the potential to expand overseas.

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