Sector News

Croda to acquire UK crop-enhancement chemical specialist Plant Impact

February 19, 2018
Chemical Value Chain

Croda has announced an agreed offer to acquire the UK-listed crop-enhancement chemical specialist Plant Impact for approximately £10 million ($14.1 million).

Under the terms of the deal, which has been unanimously recommended by the Plant Impact board, the subsidiary Croda Europe will offer Plant Impact shareholders 10.57 pence in cash for each issued and to-be-issued ordinary share, a premium of approximately 79.9% to the closing price on 15 February. The acquisition is expected to complete on 28 March 2018, subject to shareholder agreement. Croda has received irrevocable acceptances from holders of 35.1% of Plant Impact shares in respect of the offer.

Croda says that acquiring Plant Impact will extend Croda’s life-science capabilities, adding an experienced commercial team and scientists, and a range of intellectual property and products to its customer base. Plant Impact’s head office and research facility are at the Rothamsted Centre for Research and Enterprise at Harpenden, United Kingdom. It also has commercial operations in Brazil, the United States, Argentina, and West Africa, with sales in more than 14 countries.

Analysts at Bernstein (London) say they believe Plant Impact was going to be sold to private equity at the beginning of this year, until Croda came along with a superior offer. The £10-million enterprise value—Plant Impact is debt free—corresponds to 1.2x Plant Impact’s sales. The company is currently money-losing at the EBIT level due to its high cost base, but has 80% gross margins. The company ran into difficulties last year when its share price collapsed from 50p to 6p, because Bayer had indicated that it would be unable to guarantee to offtake the minimum contracted volumes of Plant Impact’s flagship Veritas product to enhance soybean yields in Brazil.

Bernstein expects significant synergies with Croda’s existing crop-care business, primarily from manufacturing, which Plant Impact currently outsources from three UK contract manufacturers, and commercial overlap. Croda’s crop-care business has sales of about £220 million/year, approximately 16% of group sales. Plant Impact’s products, principally foliar sprays, are used to enhance yields and quality in horticultural crops, cocoa, and soybeans.

“Following the announcement by Plant Impact on 13 December 2017 regarding the 2018 revenue shortfall and the severe challenge this poses to the company, the board has reviewed its strategic options in parallel with conducting a wide ranging formal sale process,” says David Jones, chairman of Plant Impact. “The board has concluded that the best interests of the shareholders are served by selling the company now whilst it remains able to support its trading activities from its remaining cash reserves. Furthermore, the board believes that Croda’s plan for Plant Impact and Croda’s current expertise and market position in agricultural chemistry is a firm basis for Plant Impact to fulfil the promise that we have consistently described…”

By Natasha Alperowicz

Source: Chemical Week

comments closed

Related News

June 24, 2022

BASF to build commercial scale battery recycling black mass plant in Schwarzheide, Germany

Chemical Value Chain

BASF will build a commercial scale battery recycling black mass plant in Schwarzheide, Germany. This investment strengthens BASF’s cathode active materials (CAM) production and recycling hub in Schwarzheide. The site is an ideal location for the build-up of battery recycling activities given the presence of many EV car manufacturers and cell producers in Central Europe.

June 24, 2022

Clariant restructures business units, reorganizes leadership

Chemical Value Chain

Clariant says it is reducing its number of businesses from five to three, by merging units, under a reorganization that is in line with the company’s purpose-led strategy and cultural transformation. The moves will position Clariant for long-term sustainable growth, the company says.

June 24, 2022

Chemicals & Plastics Procurement: what to expect in the second half of 2022

Chemical Value Chain

Chemicals & plastics industry has the most diversified end-use market across all manufacturing industries. The industry returned to growth in 2021 but a supply chain crunch prevented it from becoming stronger. The market is likely to stabilize in the second half of 2022 with a supply-demand balance.