Compass Minerals to Acquire Full Ownership of Leading Brazilian Specialty Plant Nutrition Company
August 15 2016 - 4:10PM
Business Wire
Investment Highlights
- Key milestone in Compass Minerals’
growth strategy
- Purchase consideration for remaining 65
percent of Produquímica is expected to range from $460 million to
$480 million* including the assumption of debt
- Expected to add $0.12 to $0.15 to
earnings per share in 2016, net of incremental debt financing
cost
Compass Minerals (NYSE: CMP) today announced an agreement to
purchase all outstanding interest in Produquímica Indústria e
Comércio S.A. (Produquímica), one of Brazil’s leading manufacturers
and distributors of specialty plant nutrients.
“The purchase of the remainder of Produquímica marks an
important milestone for Compass Minerals in the execution of our
growth strategy. This accretive acquisition gives us access to
higher growth markets and geographic diversification of our
earnings, while lessening our dependence on winter weather,” said
Fran Malecha, Compass Minerals president and CEO. “Produquímica’s
strong history of growth and product development in Brazil provides
Compass Minerals an excellent platform for expansion in one of the
world’s most important agriculture markets. We look forward to the
opportunities that will come from Produquímica joining Compass
Minerals.”
Compass Minerals purchased 35 percent of Produquímica in
December 2015. The expected price for the remaining 65 percent of
equity is approximately $310 million to $330 million, is based on
Produquímica’s expected 2016 performance, and will be subject to
customary, post-closing adjustments. In addition, Compass Minerals
will assume approximately $150 million in U.S. dollar equivalent
long-term debt, most of which will be retired during the fourth
quarter. The acquisition includes approximately $150 million of net
working capital.
Compass Minerals expects the transaction to add $0.12 to $0.15
to full-year 2016 diluted earnings per share.
Based in São Paulo, Brazil, Produquímica generated approximately
R$1.2 billion in net revenue and R$198 million in EBITDA* as of the
12 months ending June 30, 2016. Produquímica operates two primary
businesses – agricultural productivity and chemical solutions. The
agricultural productivity division manufactures and distributes a
broad offering of specialty plant nutrition solution-based
products. These include micronutrients, controlled release
fertilizers, and other specialty supplements that are used in
direct soil and foliar applications, as well as through irrigation
systems and for seed treatment. Many of these products are
developed through Produquímica’s robust research and development
capabilities. Produquímica also manufactures and markets specialty
chemicals, primarily for the water treatment industry and for use
in other industrial processes in Brazil.
“All of us at Produquímica are excited about the opportunities
that our customers and employees will have as part of Compass
Minerals,” said Gerhard Schultz, President of Produquímica. “We
look forward to growing with Compass Minerals in Brazil’s specialty
plant nutrition market and beyond.”
Produquímica At-A-Glance
- Headquartered in São Paulo, Brazil with
nine manufacturing facilities throughout Brazil
- Approximately 1,400 employees
- 2015 net revenue = R$1.1 billion
- 2015 EBITDA* = R$184 million
Compass Minerals expects to close the transaction in early
October 2016 subject to regulatory approval and to fund the
acquisition with new debt. This transaction was enabled by an
amendment to the prior agreement between Compass Minerals and key
shareholders of Produquímica. Details of the amendment can be found
in a Form 8-K that the company filed today with the U.S. Securities
and Exchange Commission.
*Based Brazilian Real-to-US$ exchange rate of
R$3.18/US$1.00.
*Earnings before interest, taxes, depreciation and amortization,
adjusted for special items.
About Compass Minerals
Compass Minerals is a leading provider of essential minerals
that solve nature’s challenges, including salt for winter roadway
safety and other consumer, industrial and agricultural uses, and
specialty plant nutrition minerals that improve the quality and
yield of crops. Named one of Forbes’ 100 Most Trustworthy Companies
in America in 2016 and 2015, Compass Minerals’ mission is to be the
best essential minerals company by delivering where and when it
matters. The company produces its minerals at locations throughout
the U.S. and Canada and in the U.K. For more information about
Compass Minerals and its products, please visit
www.compassminerals.com.
This press release may contain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including without limitation statements about the expected
purchase price of the remaining Produquímica equity, additions to
earnings per share, amount of debt assumed, the timing of the
closing date and retirement of debt, expansion in agriculture
markets and growth in the plant nutrition market. Compass Minerals
International, Inc. (the "company") uses words such as “may,”
“would,” “could,” “should,” “will,” “likely,” “expect,”
“anticipate,” “believe,” “intend,” “plan,” “forecast,”
“outlook,” “project,” “estimate” and similar expressions suggesting
future outcomes or events to identify forward-looking statements or
forward-looking information. These statements are based on the
company’s current expectations and involve risks and uncertainties
that could cause the company’s actual results to differ materially.
The differences could be caused by a number of factors, including
the risk that regulatory approvals required for the purchase are
not obtained, the risk that financing required to fund the purchase
price is not obtained, foreign exchange rates, the risk that the
proposed full ownership acquisition of Produquímica could disrupt
the plans and operations of the company, Produquímica or both, and
the risk that the company may not realize the expected financial
and other benefits from the proposed acquisition. For further
information on risks and uncertainties that may affect the
company’s business, see the “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” sections of the company’s Annual Report on Form 10-K
for the year ended December 31, 2015 and its Quarterly Reports on
Form 10-Q for the quarters ended March 31, 2016 and June 30, 2016
filed with the SEC. The company undertakes no obligation to update
any forward-looking statements made in this press release to
reflect future events or developments. Because it is not possible
to predict or identify all such factors, this list cannot be
considered a complete set of all potential risks or
uncertainties.
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version on businesswire.com: http://www.businesswire.com/news/home/20160815006144/en/
Compass MineralsInvestor ContactTheresa L. Womble,
+1-913-344-9362Director of Investor
Relationswomblet@compassminerals.comorMedia ContactTara
Hart, +1-913-344-9319Manager of Corporate
AffairsMediaRelations@compassminerals.com
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