Corteva (Indianapolis, Indiana) says it has signed a definitive agreement to acquire Stoller Group (Houston, Texas), a producer of biostimulants and plant nutrition products, for $1.2 billion.
Stoller is one of the largest independent biologicals companies globally, with operations in more than 60 countries and more than $400 million in annual sales. The deal brings Corteva immediate scale and profitability in a fast-growing agriculture segment and closely follows a definitive agreement to acquire Symborg (Murcia, Spain) for an undisclosed sum. The ag biologicals market is expected to grow at high single digits annually through 2035 and represent approximately 25% of the overall crop protection market by then.
Laurence Alexander, analyst at Jefferies, estimates that the Stoller deal will equal $0.15 in cumulative earnings per share (EPS) by 2024, or about 4% of total Corteva EPS.
“Biologicals provide farmers with sustainably-advantaged tools that complement crop protection technologies and, collectively, can work to address global challenges around food security and climate change. Stoller represents a leader in the biologicals industry given its commercial presence and market expansion potential, while also delivering attractive growth and operating margins,” says Chuck Magro, Corteva CEO. Stoller provides a platform for expanding and accelerating Corteva’s Biologicals business, he adds.
The Stoller purchase price represents an enterprise value multiple of approximately 12x based on Stoller’s expected EBITDA for 2022 on a stand-alone basis. The purchase price will be paid at closing, which is anticipated to be completed in the first half of 2023 following regulatory approvals and satisfaction of customary closing conditions. The company expects Stoller results to be accretive to both operating EBITDA and operating EPS for 2023.
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