Specialty chemicals group Croda has strengthened its agriculture business with the acquisition of Dutch seed care company Incotec.
The FTSE 250 business will pay €155m (£109m) including debt for Incotec, which researches and provides coatings for seeds to protect them from disease. It also carries out genetic and quality analysis.
Croda already works in the sector through its Life Sciences division, which supplies chemicals and services that help protect crops, allowing farmers to get higher yields from them.
Seed enhancement is seen by Croda as a growth area and the acquisition should boost its standing in the $207bn-a-year global agri-chemicals business. Croda hopes combining its research abilities with those of Incotec will add new products to its arsenal.
Under the terms of the deal, Incotec, which had revenues of €71m last year, will retain its brand but will get additional funding from Croda.
Steve Foots, Croda chief executive, said: “Incotec is a rare asset in a niche, high-value, fast-growing sector of the global crop market. With an experienced research and development-led management team, Incotec brings differentiated market-leading technologies, world-class innovation and strong customer relationships.”
The deal is the first since the company appointed Anthony Fitzpatrick, a former UBS and Jefferies investment banker specialising in the chemicals sector, as president of corporate development. He was charged with leading Croda’s search for new acquisitions to expand the company’s capabilities.
Croda’s interim results showed that at the end of June it had £329m of cash and credit facilities available to fund deals.
News of the acquisition was warmly received by investors with Croda shares rising 1.6pc against the wider FTSE 250, which was 0.6pc higher.
By Alan Tovey
Source: The Telegraph
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