TPG, ADIA back acquisition of agrochemicals producer Arysta

The company is currently owned by US chemicals player Platform Specialty Products (PSP), which bought the business from Permira in October 2014 for about $3.51 billion.

TPG and ADIA – the former participating through its seventh pan-Asian fund, which is currently in the market with a target of $4-4.5 billion – will each invest $600 million in UPL for a combined 22% in the business. This will facilitate UPL's purchase of 100% of Arysta at a valuation of 9.9x EBITDA. In addition to the equity contributions from TPG and ADIA, UPL has sourced $3 billion in debt financing.

Arysta was formed in 2001 through the merger of the life-sciences divisions of Japan's Tomen Corp. and trading company Nichimen Corp, owned by Sojitz Holdings Corp. Olympus Capital first invested in the business in 2002, increasing its stake over time, and then exited to Permira for $2.2 billion in 2007. 

It is a global provider of crop protection and yield enhancement solutions, chiefly fungicides, herbicides and insecticides, and plant nutrition products. Arysta, which employs 3,400 people in 60 countries, generated revenue of $1.89 billion in 2017, up from $1.82 billion in 2016. For the 12 months ended March 2018, operating revenue and adjusted EBITDA reached $2 billion and $424 million, respectively.

PSP said in a statement that Arysta had flourished under its ownership, growing to global scale through a series of complementary acquisitions, doubling the peak sales value potential of its R&D pipeline, and focusing on high-value specialty applications. Once the transaction closes – in late 2018 or early 2019 – Arysta and UPL will become the world's fifth largest crop protection company, reaching more than 130 countries with a portfolio of 12,800 products.

UPL was founded in 1969 as an Indian contract manufacturer of agrochemicals and has since evolved into a global crop protection products player with a market capitalization of approximately $4.6 billion and operating revenue and EBITDA of $2.7 billion and $543 million for the 2018 financial year. It expects the acquisition of Arysta to drive annual synergies of more than $200 million.

"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, CEO of UPL, said in a separate statement. He described the transaction as a "perfect match" with synergies across geographies, crops, and products.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Industrials
• Buyouts
• North Asia
• South Asia
• Japan
• India
• TPG Capital
• Abu Dhabi Investment Authority (ADIA)
• Agriculture