Platform Specialty Products Corp (NYSE:PAH), a Miami-based chemical company, has agreed to acquire Arysta LifeScience, an Ireland-based agriculture chemical maker at $3.5 billion, including debt. Permira, Arysta’s private equity owner, earlier contemplated a U.S. IPO, although the firm progressed with the sale as Platform Specialty’s interest grew.
Ackman’s stake in Platform Specialty
Pershing Square Capital Management, the activist hedge fund headed by Bill Ackman, initiated its position in Platform Specialty Products Corp. after the chemical company started trading on the New York Stock Exchange in January. Dan Leever, the chemical company’s CEO, exuded confidence that the NYSE listing would enable the company to further its objective of building a portfolio of market-leading specialty chemicals.
Bill Ackman’s Pershing Square was up 25% in the first six months of the year, making it the top performer of the first half among hedge funds. He has has a a good year in his largest longs, including Platform Specialty Products Corp.
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Platform Specialty was formed last year out of a shell company co-founded by Martin Franklin, the consumer goods tycoon, and it has Mr. Ackman as a 24% shareholder. Arysta LifeScience was based in Tokyo. It was bought by Permira, an European private equity firm, in 2008 for €1.95 billion in what was the private equity group’s first acquisition in Japan.
Recently Ackman said he was targeting a “decent-sized stake” in a U.S. company, and it appears as if this is what the activist was referring to. Arysta recently filed paperwork with U.S. regulators in September to lay the groundwork for an initial public offering, according to a report from Dana Mattioli and Ryan Dezember of The Wall Street Journal.
Platform Specialty – Cash-and-stock deal
Citing people familiar with the development, the Financial Times reports that Platform Specialty and Arysta LifeScience agreed terms on a cash and stock deal and could announce the transaction as early as Monday. The deal envisages Platform Specialty paying $2.9 billion in cash and $600 million in stock to Permira.
Arysta manufactures farming chemicals such as insecticides, provides crop protection and develops pharmaceutical additives and veterinary medicines. The agrochemical company was created in 2001 through the merger of the agrochemical businesses of former Japanese trading companies Tomen and Nichimen.
Miami, Fla.-based Platform Specialty has been announcing a series of acquisitions recently. In April, it announced its agreement to buy Chemtura AgroSolutions, a provider of agrochemicals and seed treatment products, for $1 billion. In August, Platform Specialty agreed to buy Agriphar, a premier European agrochemicals group, in a €300 million deal.
Martin E. Franklin, Platform’s Founder and Chairman, said, “This is a watershed event for Platform. Over the past twelve months we have demonstrated significant progress and exercised tremendous discipline as we executed against our build-up strategy. Through the acquisitions of Arysta, CAS, and Agriphar we have established a leading position within an attractive asset-lite, high-touch specialty chemicals vertical. As we work to accelerate the organic growth within these businesses, we remain opportunistic on the acquisition front and will look to strategically expand our portfolio across other attractive, niche verticals. The management teams we have assembled through our acquisitions provide us with some of the best talent in the industry, and I am confident that by working together, each of our businesses will thrive and create increasing value for our shareholders.”
Daniel H. Leever, Platform’s Chief Executive Officer, commented, “Bringing Arysta under the Platform umbrella will create a broad agrochemicals offering that is uniquely positioned to provide farmers, globally, with a full suite of products to address their product and geography specific needs. Arysta’s focus on creating highly-differentiated, highly-specialized, and highly-localized formulations through extensive development and technical service is in line with CAS’ and Agriphar’s ‘asset-lite, high-touch’ business models. All three of these companies possess the expertise and agility necessary to develop solutions that are tailored to an expansive range of crops and global markets and that will drive profitable growth for Platform over the long term. Arysta contains many talented executives that will be joining talent pools at CAS and Agriphar. Our greatest assets are our people and the team evolving under Wayne will be both strong and deep. This transaction will further deepen our bench strength at Platform as a whole. We continue to see many attractive opportunities that meet our strategic and financial criteria.”
Wayne Hewett, Arysta’s President and Chief Executive Officer, commented, “The strength of Arysta’s strategy is evident through the growth we have exhibited in recent years and having Platform as our new home and the benefit of the products and personnel within CAS and Agriphar will provide us with additional resources and talent to accelerate this momentum. With powerful global trends placing increasing demand and new challenges on growers around the world, the product lines and innovation capabilities of Platform’s agrochemicals companies will be among the leaders in offering the most comprehensive range of traditional and non-traditional solutions.”