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LONDON, UK / ACCESSWIRE / July 24, 2018 / If you want access to our free research report on Platform Specialty Products Corp. (NYSE: PAH) ("Platform"), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=PAH as the Company's latest news hit the wire. On July 20, 2018, the Company announced the divestment of its Agricultural Solutions business to India's UPL Corp. Ltd. Platform's divested Agricultural Solutions business includes Arysta LifeScience Inc. and its subsidiaries (collectively referred to as "Arysta"). UPL Corp. Ltd is a wholly-owned subsidiary UPL Ltd. The all-cash deal is valued at approximately $4.2 billion. Register today and get access to over 1,000 Free Research Reports by joining our site below:
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About Arysta LifeScience Inc.
Platform's Arysta develops, markets, and distributes innovative, high-quality chemical crop protection solutions, including BioSolutions and Seed Treatment for the agro-science and health & nutrition science market. Platform acquired Arysta in 2015 and merged it with the businesses of its previously-acquired crop protection Companies, Agriphar and the Chemtura AgroSolutions (acquired in 2014).
For the twelve months ended March 31, 2018, Arysta's operating revenues were approximately $2 billion and its adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) were $424 million.
Details of the Transaction
The divestment is part of Platform's strategy of re-organization of its businesses and the first step towards segregating its Agricultural Solutions and Performance Solutions businesses. This move will enable it to establish itself as a leading player in the global off-patent crop protection business.
UPL Corp. has agreed to pay $4.2 billion in cash for Arysta's businesses. A wholly-owned subsidiary of the Abu Dhabi Investment Authority ("ADIA") and private equity firm TPG Capital Asia ("TPG") have partnered with UPL Corp. to complete the acquisition of Arysta. ADIA and TPG have together agreed to invest $1.2 billion ($600 million each) against an approximately 2% joint stake in UPL Corp.
UPL plans to merge the businesses of UPL Corp. and Arysta and form ‘New UPL’. The deal is expected to create one of the largest crop protection Companies in the world. UPL will expand its product portfolio, gain access to various patented technologies, and expand its distribution network across the globe with this acquisition. UPL has arranged financing of approximately $3 billion from MUFG Bank, Ltd and Coöperatieve Rabobank U.A. (Hong Kong Branch) to complete the acquisition of Arysta. UPL expects that the deal will be accretive to its earnings per share (EPS) by INR10 to INR12 in FY20. UPL also expects annual run-rate synergies of over $200 million on completion of the deal.
The divestment is expected to close either by the end of FY18, or in early FY19, subject to the receipt of regulatory approvals and other closing conditions.
Name Change Post Divestment
Once the transaction is completed, Platform plans to re-emerge with a new identity and will be known as Element Solutions Inc. ("Element"). The Company will trade on the New York Stock Exchange (NYSE) with the ticker "ESI" on the successful completion of the divestment of Arysta. In its new avatar as Element, it plans to merge current businesses with its existing Performance Solutions segment, which includes a portfolio of specialty chemicals businesses catering to the electronics, industrials, and energy end-markets. Element will concentrate on building its core business via organic growth and strategic acquisitions.
Platform plans to utilize the proceeds from the divestment to pay off its existing debt. The Company's Board has also authorized share buybacks of around $750 million on completion of the divestment. Element is expected to have a net debt of less than $1 billion, and an annual pro-forma adjusted EBITDA of $425 million to $445 million, based on its existing adjusted EBITDA for FY18. The divestment is expected to result in estimated annual run-rate cost savings of nearly $25 million in the next 12 months to 18 months.
On a separate note, the Company also announced the induction of Nichelle Maynard-Elliott to the Company's Board, effective August 15, 2018. Maynard-Elliott is currently with Praxair, Inc. as their Executive Director of Mergers & Acquisitions, and has been a practicing lawyer prior to joining Praxair.
Commenting on the divestment, Rakesh Sachdev, Chief Executive Officer (CEO) of Platform, said:
"This transaction marks an inflection point for Platform. At closing, we will have achieved our separation and the objectives associated with it - setting up Arysta for long-term success and improving the balance sheet of Platform to position the Company well for future growth. We will have a terrific portfolio of businesses at Element Solutions, an outstanding team, and numerous opportunities in front of us."
Jai Shroff, Group CEO and Executive Director, UPL, stated:
"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. 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."
About UPL Ltd
Headquartered in Mumbai, India, UPL is one of the leading global crop protection products Companies that offers protection against most pest infection sources. The Company has a diversified business portfolio covering not only agrochemicals but also seeds, seed treatment solutions, post-harvest solutions, and industrial chemicals. It has a presence in over 130 countries, including 33 manufacturing units in 11 countries, and is focused on agro-based economies like India and Brazil. The Company had a market capitalization of $4.6 billion as on June 30, 2018, and its operating revenues were approximately $2.7 billion for FY18.
UPL Corp. is a wholly-owned subsidiary of UPL Ltd and has a portfolio of a diversified crop protection and post-harvest solution business with an established presence and leading market position in major agricultural regions worldwide.
About Platform Specialty Products Corp.
West Palm Beach, Florida-based Platform is a global, diversified producer of high technology specialty chemical products, and provider of technical services. The Company formulates a wide range of specialty chemicals aimed at several industries, including agricultural, animal health, electronics, graphic arts, plating, water treatment, and offshore oil production and drilling.
Stock Performance Snapshot
July 23, 2018 - At Monday's closing bell, Platform Specialty Products' stock slightly fell 0.26%, ending the trading session at $11.72.
Volume traded for the day: 6.37 million shares, which was above the 3-month average volume of 3.17 million shares.
Stock performance in the last month - up 1.21%; previous three-month period - up 14.57%; past six-month period - up 3.99%; and year-to-date - up 18.15%
After yesterday's close, Platform Specialty Products' market cap was at $3.61 billion.
The stock is part of the Basic Materials sector, categorized under the Specialty Chemicals industry.
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