ICL (ICL) Reports Acquisition of South American Plant Nutrition Business from Compass Minerals (CMP) for $402M
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ICL (NYSE: ICL), a leading global specialty minerals and specialty chemicals company, today announced it has entered into a definitive agreement to acquire Compass Minerals (NYSE: CMP) América do Sul S.A., which includes the South American Plant Nutrition business of Compass Minerals – after a planned carve-out of the existing water treatment and chemicals businesses – for approximately R$2,207 million (~US$402 million, based on a Brazilian real-to-U.S. dollar exchange rate of R$5.4951/US$1.00). This amount includes the assumption of approximately R$600 million (~US$109 million) of net debt and is subject to customary post-closing adjustments. In addition, the transaction includes an earnout of up to approximately R$88 million (~US$16 million).
The South American Plant Nutrition business is the leading specialty plant nutrition business in Brazil and offers a broad range of solutions for plant nutrition and stimulation, soil treatment, seed treatment and plant health, covering all key Brazilian crops. Its product portfolio includes enhanced efficiency fertilizers and controlled-release fertilizers, soil and foliar micronutrients, secondary nutrients, biostimulants, and adjuvants. The business has an existing presence in 25 out of 26 Brazilian states and serves more than 32,000 farms directly and indirectly, with direct-to-farm sales accounting for approximately 50% of total sales.
“This transaction, together with our recent acquisition of Fertiláqua in Brazil and our existing specialty plant nutrition business there, will position ICL as the leading specialty plant nutrition company in Brazil, one of the world’s fastest growing agriculture markets. This important next step delivers on our stated strategy of achieving leadership positions in high-growth specialty plant nutrition markets, such as Brazil, and also accelerates our progress toward long-term global leadership for our Innovative Ag Solutions division,” said Raviv Zoller, president and CEO of ICL.
“Also, this will significantly expand ICL’s product portfolio and profitability, while providing further seasonal balance between the Northern and Southern hemispheres. In addition, this acquisition is expected to generate significant commercial and operational synergy opportunities through the combined strengths of ICL, Fertiláqua and the market leading South American Plant Nutrition business of Compass Minerals and will also allow us to deliver the critical mass we have been seeking in Brazil. We look forward to welcoming the South American Plant Nutrition team and having them join our existing team in Brazil,” concluded Zoller.
Upon completion of the acquisition, ICL expects it will be able to offer the broadest and most advanced portfolio of plant nutrition products covering the entire agricultural value chain. Its expanded customer base will span from B2B providers – such as plant nutrition manufacturers and bulk blenders – to B2C partners – such as ag-input retailers, co-operatives and large farms. The combined businesses will leverage a well-established asset base, with a total of eight production sites and a sizable salesforce providing full commercial coverage for all agricultural regions in Brazil.
“While the South American Plant Nutrition business is not part of our forward-looking strategy, we continue to believe the future is bright for these productive assets,” said Kevin S. Crutchfield, president and CEO of Compass Minerals. “We are therefore pleased to see this business, and more importantly the strong team of professionals who operate it, find such a strategic home with ICL.”
The acquisition is expected to close by the third quarter of 2021, subject to the completion of the carve-out of Compass Mineral’s South American water treatment and chemicals businesses and the fulfilment of customary closing conditions, including regulatory approvals.
About Compass Minerals América do Sul S.A.
Founded in 1965 as Produquímica, the company is the leading specialty plant nutrition player in Brazil and offers a broad range of solutions for plant nutrition and stimulation, seed treatment, and plant health across all key Brazilian crops, including soybeans, corn, coffee, sugarcane, cotton, fruits, and vegetables. The company's product portfolio includes enhanced efficiency fertilizers and controlled-release fertilizers, soil and foliar micronutrients, secondary nutrients (calcium, magnesium and sulfur), biostimulants, and adjuvants, as well as animal nutrition and plant nutrition ingredients for B2B customers.
The company has a presence in 25 out of 26 Brazilian states and serves more than 2,000 farms directly and more than 30,000 farms indirectly, by also serving more than 250 ag-input retailers and co-operatives. Headquartered in São Paulo, the company employs more than 1,000 people and operates six production sites and one research and development center.
Full year 2020 net revenue was approximately R$1,442 million (~US$284 million), with EBITDA of approximately R$235 million (~US$46 million), excluding the water treatment and chemicals businesses(1). These results demonstrate strong top-line growth and reflect a compounded annual growth rate of approximately 10%, since the business was acquired by Compass Mineral in 2015 and 2016.
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