Compass Minerals has completed its purchase of one of Brazil’s leading manufactures and distributors of specialty plant nutrients. The remaining interest in Produquímica Indústria e Comércio S.A. (Produquímica) has been sold, an acquisition that is expected to add $.12 to $15 per share to Compass Minerals’ 2016 earnings.
“With this acquisition complete, Compass Minerals has delivered on a key component of our growth strategy. We have expanded the geographic scope of our operations into one of the world’s most important agriculture markets, broadened our portfolio of specialty plant nutrition products, and reduced our dependency on winter weather,” said Fran Malecha, Compass Minerals president and CEO. “I am delighted to officially welcome all of the employees and associates of Produquímica to Compass Minerals and look forward to the growth we can achieve as one company.”
The purchase is expected to impact North American growers in two ways. By combining U.S. and Brazilian R&D efforts, Compass Minerals will be able to evaluate new products and technologies year round, leading to a stronger pipeline of innovative technologies. It will also expand Compass Minerals’ manufacturing capacity with the addition of multiple plants fully dedicated to manufacturing ag products.
Compass Minerals purchased 35 percent of Produquímica in December 2015. Total consideration for the remainder of Produquímica was approximately $465 million (based on a Brazilian Real-to-US$ exchange rate of R$3.25/US$1.00). This includes the purchase of equity valued at $328 million based on Produquímica’s estimated 2016 earnings, subject to customary, post-closing adjustments, and the assumption of approximately $137 million of net debt. The company expects to retire a portion of Produquímica’s debt during the fourth quarter of 2016.
Produquimica in based in Sao Paulo, Brazil. They operate two main businesses, agricultural productivity and chemical solutions.