Platform Specialty Products Corporation, a global specialty chemicals company, announced that it has entered into a definitive agreement to acquire Agriphar, a premier European agrochemicals group. The transaction is valued at €300 million and is subject to customary closing conditions and working capital and other adjustments. It is expected to be funded through a combination of debt and cash on hand with a closing in the fourth quarter of 2014.
Agriphar is a European crop protection group with leading product development, registration and distribution capabilities. Its product portfolio provides a wide range of herbicides, fungicides and insecticides with end markets primarily across Europe and is supported by a talented team of researchers and regulatory experts. With its main operational facility in Belgium and owned distribution subsidiaries in France, Spain, Greece and Italy, Agriphar has a strong on the ground presence in Western Europe and has developed a footprint in Central and Latin America. Agriphar brings a wide variety of product applications and expertise across a range of geographic markets. These added capabilities should amplify the benefits from Platform's Chemtura AgroSolutions ("CAS") acquisition, which was announced in April of this year and is expected to close in the fourth quarter of 2014, subject to the satisfaction of certain conditions.
Over the last several years, Agriphar has demonstrated a strong track record of profitable growth via the introduction of new products and expansion into additional European countries. This acquisition is expected to be immediately accretive to Platform's adjusted earnings, prior to the benefit of potential synergies. Agriphar's revenue in 2013 was approximately €127 million and adjusted EBITDA margin slightly above 20%. Agriphar's free cash flow and profitability are in line with Platform's "asset-lite/high-touch" business model. Capital expenditures (excluding capitalized registration costs) are below 2% of revenue. Synergies are expected to be in excess of 25% of underlying EBITDA following integration with CAS.
Martin E. Franklin, Platform's Founder and Chairman, said, "The acquisition of Agriphar is exemplary of the strategy we outlined following our initial acquisition of MacDermid and is an attractive bolt on to our pending CAS acquisition. Given the complementary nature of their products and capabilities as well as the strong leadership at both companies, Agriphar and CAS should flourish together and deliver increasing value for our shareholders. We are delighted to welcome Agriphar's team to PSP and look forward to working with them to build a leading business in the agrochemicals space over the long term."
Daniel H. Leever, Platform's Chief Executive Officer, commented, "The Agriphar transaction fits well within our stated framework of bolstering our capabilities in key verticals through bolt-on acquisitions. Agriphar's asset-lite/high-touch business aligns with our disciplined M&A criteria and demonstrates our ability to execute against our clearly-defined growth strategy. We believe this immediately accretive transaction will position us as a strong, global player in the agrochemicals space, and Agriphar's team of highly-skilled technicians and highly-specialized products will enable to us to capitalize on the favorable dynamics within the industry."
Lazard and Barclays Capital acted as financial advisors and Allen & Overy acted as legal counsel to Platform on the transaction. Bank Degroof and Tegris Advisors served as financial advisors and Koehler-Magne-Serres Avocats served as legal counsel for Agriphar.