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American Vanguard's (AVD) Subsidiary Invests in Bi-PA

Zacks Equity Research

American Vanguard Corp. AVD recently declared that its fully-owned subsidiary, AMVAC-Netherlands BV, has invested in Biological Products for Agriculture (Bi-PA). Bi-PA operates as a product development engine, helping in end-market commercialization of research and discovery. It achieves commercial development by optimizing formulations and securing regulatory approval.

The investment enables American Vanguard to hold a 15% share in Bi-PA’s total enterprise valuation. Additionally, it receives distribution rights for Bi-PA’s Vintec Trichoderma biological fungus control agent and subsequent products in the Americas as well as access to new products and technologies from Bi-PA’s scientific research programs with the Italian research-based Fondazione Edmund Mach Institute, and other future research collaborations.

According to Eric Wintemute, Chairman and CEO of American Vanguard, the investment and ownership position in Bi-PA will help the company to achieve cutting-edge technological innovation and greater international market access. The company feels that biological solutions technology is an important complement to synthetic chemistry and genetically modified defenses in crop protection and non-crop applications.

Moreover, American Vanguard will be promoting and commercializing Bi-PA’s current Trichoderma-based products, along with subsequent product developments in North, Central and South America to provide a wide range of chemical and biological protective technologies to its customers.

American Vanguard recently reported its fourth-quarter 2015 results. The company recorded a roughly 67% increase in profits to $3 million in the quarter. Net sales for the quarter were $84 million, up 8% from $77.6 million in the prior-year quarter.

Shares of the company rose 15.8% to close at $14.99 on Mar 2.

American Vanguard currently holds a Zacks Rank #4 (Sell).

Better-ranked companies in the specialty chemical sector include Daqo New Energy Corp. DQ, Ferroglobe PLC GSM and Flexible Solutions International Inc. FSI. While Daqo New Energy sports a Zacks Rank #1 (Strong Buy), both Ferroglobe and Flexible Solutions International carry a Zacks Rank #2 (Buy).

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