AgroFresh Solutions Announces Various Agreements with The Dow Chemical Company and Avenue Capital
April 05 2017 - 4:01PM
Business Wire
Revisions to Tax Receivables Agreement, Warrant
Purchase Agreement and Payable Balances Provides Immediate
Estimated Benefit of Approximately $85 million
AgroFresh Solutions, Inc. ("AgroFresh" or the "Company")
(NASDAQ: AGFS), a global leader in produce freshness solutions,
announced today revisions to various agreements arising from its
separation from The Dow Chemical Company (“Dow”). Collectively,
these revisions increase the Company’s equity and reduce its
interest expense and cash payments associated with certain ongoing
obligations.
Jordi Ferre, Chief Executive Officer, commented, "The
modifications negotiated with Dow and Avenue Capital reflect their
confidence in AgroFresh, our proprietary SmartFreshTM technology
and the future prospect for the Company to become the leader in
solutions that extend the freshness and quality of fruit and
produce from storage to retail. Not only will this agreement
immediately increase our equity and improve our future financial
performance by reducing the interest expense and cash payments,
importantly it will help us accelerate our path into future
growth.”
The existing Tax Receivables Agreement (“TRA”) has been amended
to provide that AgroFresh’s obligations to make future payments
will be reduced from 85% to 50% of the tax savings associated with
the step-up in the value of the AgroFresh assets that occurred in
connection with the business combination. The net present value of
the TRA liability will be reduced by $65 million and interest
expense on this obligation is expected to decrease by approximately
$6 million per year.
Dow has also agreed to buy up to 10% of AgroFresh’s outstanding
shares through open market purchases. Additionally, the Company,
Dow and Avenue have agreed to terminate the Warrant Purchase
Agreement entered into in connection with the business combination,
with no further obligations on the part of any of the parties.
Lastly, Dow and Avenue Capital (through its affiliates) have agreed
to make available up to $100 million of aggregate borrowing
capacity for potential strategic acquisitions by the Company.
About AgroFresh
AgroFresh Solutions, Inc. (NASDAQ: AGFS) is a global industry
leader in providing innovative data-driven specialty solutions
aimed at enabling growers and packers of fresh produce to preserve
and enhance the freshness, quality and value of fresh produce and
to maximize the percentage of produce supplied to the market
relative to the amount of produce grown. Its flagship product is
the SmartFresh™ Quality System, a freshness protection technology
proven to maintain firmness, texture and appearance of fruits
during storage and transport. SmartFresh is currently
commercialized in over 40 countries worldwide. Additionally the
company has a number of different solutions and application
technologies that have either been launched (Harvista, RipeLock,
LandSpring) or will be launched in the future that will extend its
footprint to other crops and steps of the global produce supply
chain. For more information, please visit www.agrofresh.com.
Forward-Looking Statements
In addition to historical information, this release may contain
"forward-looking statements" within the meaning of the "safe
harbor" provisions of the United States Private Securities
Litigation Reform Act of 1995. All statements, other than
statements of historical facts, included in this release that
address activities, events or developments that the Company expects
or anticipates will or may occur in the future are forward-looking
statements and are identified with, but not limited to, words such
as "anticipate", "believe", "expect", "estimate", "plan",
"outlook", and "project" and other similar expressions (or the
negative versions of such words or expressions). Forward-looking
statements include, without limitation, information concerning the
Company's possible or assumed future results of operations,
including all statements regarding financial guidance, anticipated
future growth, business strategies, competitive position, industry
environment, potential acquisition and growth opportunities, the
value of the revisions to the Company’s agreements with Dow
described herein, and the effects of regulation. These statements
are based on management's current expectations and beliefs, as well
as a number of assumptions concerning future events. Such
forward-looking statements are subject to known and unknown risks,
uncertainties, assumptions and other important factors, many of
which are outside the Company's management's control that could
cause actual results to differ materially from the results
discussed in the forward-looking statements. These risks include,
without limitation, the risk of increased competition; the ability
of the business to grow and manage growth profitably; costs related
to the Business Combination and/or related to operating AgroFresh
as a stand-alone public company; changes in applicable laws or
regulations, and the possibility that the Company may be adversely
affected by other economic, business, and/or competitive factors.
Additional risks and uncertainties are identified and discussed in
the Company's filings with the SEC, which are available at the
SEC's website at www.sec.gov.
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version on businesswire.com: http://www.businesswire.com/news/home/20170405006221/en/
Gregory FCAJoe Hassett, 610-228-2110joeh@gregoryfca.com
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