UPL Limited Acquires Arysta LifeScience
MUMBAI, INDIA - Creating an integrated patent and post-patent agricultural solutions business that is making waves all over the world is UPL Limited—the company recently acquired Arysta LifeScience, which is a leader in innovative crop protection solutions that includes BioSolutions and Seed Treatment, for $4.2 billion in cash consideration, subject to customary closing conditions and regulatory approvals.
“The acquisition of Arysta is a transformation transaction for UPL. 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. This transaction is a ‘perfect match’ with powerful synergies across geographies, crops, and products, strengthened through best-in-class manufacturing and differentiated R&D capabilities,” Chief Executive Officer and Executive Director of UPL Jai Shroff shared. “We are bringing together two winning teams with strong values and successful track records to create a strong platform for our mission of Farmer First and sustainable growth. New UPL will focus on making agriculture more sustainable and farmers more resilient to the impact of climate change and is committed to speeding progress towards the UN’s 2030 sustainable development goals.”
The goal for the acquisition, which will create what the company is referring to as the New UPL, is to embody a persuasive value proposition for growers, distributors, suppliers, and innovation partners in a consolidating market. To bring the acquisition to fruition, a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) and TPG partnered with UPL Corp to support the proposed acquisition.
“The combination of Arysta and UPL, two remarkably complementary companies, will create a new paradigm in the crop protection market with an efficient supply chain and formulation innovation capabilities. This new company is positioned to provide deep and wide local customer solutions and selling presences for broad acre and niche crops and markets, and a leading bio-solutions business. With its scale and capabilities, we believe the combined companies will represent a compelling value proposition for growers, distributors, suppliers, and innovation partners in a consolidating market,” Rakesh Sachdev, CEO of Platform, which is Arysta's parent company, said.
According to a press release, the following in regards to financing the acquisition:
- Transaction is backed by a US $1.2 billion equity investment from ADIA and TG. ADIA and TPG will each invest US $600 million for a combined stake of 22 percent in UPL Corp
- UPL Corp has received debt financing commitments of US $3 billion for the balance of the consideration with bullet maturity of 5 years, from MUFG Bank, Ltd. and Coöperateive Rabobank U.A. (Hong Kong Branch)
- UPL targets to retain an investment grade credit rating following the transaction
- UPL has a proven track record of acquisitions and disciplined deleveraging and expects the combined business to deliver strong cash flows
The acquisition, which is expected to be completed in late-2018 or early-2019, is expected to lead to UPL’s annual run-rate synergies of over $200 million. In addition to these expectations, the combined New UPL looks forward to more opportunities to drive revenue growth thanks to the broader portfolio, geographic presence, and shared innovation capabilities.
“We decided to separate our business last year in order to position both the Performance Solutions and Agricultural Solutions businesses for future growth and additional compelling value creation opportunities,” Chairman of Platform Martin E. Franklin said. “This transaction with UPL creates an agricultural chemicals powerhouse with highly complementary capabilities. The future is bright for these businesses, and we are excited to see what the two combined companies can accomplish.”
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