Bill Ackman Comments on Platform Specialty Products Corp
- By Holly LaFon
In September, Platform (PAH) hosted an investor day where it provided a detailed explanation of the secular growth drivers and unique competitive positioning of each of its Performance and Agricultural Solutions businesses, along with long-term guidance of 4% annual organic revenue growth and high-single digit annual EBITDA growth.
The company also announced that it had reached a revised agreement with Permira to settle its $600 million preferred stock liability related to the Arysta acquisition. Under the revised agreement, Platform has the option to pay Permira $450 million in cash and 5.5 million shares, which equates to $500 million at the current market prices and represents a savings of $100 million relative to the original agreement. To finance the cash portion of the agreement, the company raised $400 million of equity and, as a result, was able to refinance $2 billion of its debt, reducing the rate on this debt by 50 basis points and extending the maturities by three years to 2023.
Warning! GuruFocus has detected 2 Warning Signs with PAH. Click here to check it out.
The intrinsic value of PAH
At the beginning of November, Platform reported strong third quarter earnings. The company delivered 3% organic revenue growth, comprised of 4% growth in Agricultural Solutions and 2% in Performance Solutions. The results are particularly impressive given the cyclical weakness in the company's end markets. EBITDA grew 14%, due to 5% growth before synergies and corporate costs, 6% impact from net synergies, and 3% from FX.
From Bill Ackman (Trades, Portfolio)'s Pershing Square third-quarter shareholder letter.
This article first appeared on GuruFocus.
Warning! GuruFocus has detected 2 Warning Signs with PAH. Click here to check it out.
The intrinsic value of PAH
