Investment Highlights
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Key step in Compass Minerals Plant Nutrition growth strategy
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Significant piece of the acquisition element in the company’s strategy
to exceed $500 million in EBITDA*
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Provides attractive entry into Brazil’s specialty plant nutrition
market
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Expected to be accretive in first year, net of incremental debt
financing
OVERLAND PARK, Kan.--(BUSINESS WIRE)--Dec. 17, 2015--
Compass Minerals (NYSE: CMP) has signed a definitive agreement to
purchase a 35 percent stake in Produquímica Industria e Comercio S.A.
(Produquímica), one of Brazil’s leading manufacturers and distributors
of specialty plant nutrients. The all-cash transaction valued at R$452.4
million (approximately US$115.9 million at today’s exchange rate) is
subject to customary post-closing adjustments. This agreement also
includes a path to full ownership by early 2019.
“We are excited to enter one of the world’s largest and most important
agricultural markets with Produquímica,” said Fran Malecha, Compass
Minerals president and CEO. “Produquímica has a long history in Brazil
and strong prospects for continued growth and margin expansion. Its wide
range of specialty plant nutrients, application technologies, and
extensive distribution network, are uniquely positioned to meet growers’
need for yield enhancement. Produquímica is a good strategic fit with
our existing plant nutrition business, and this investment is an
important part of our growth plan.”
Based in São Paulo, Brazil, Produquímica is expected to generate
approximately R$1.0 billion in revenue in 2015 through 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. Produquímica also manufactures and markets specialty
chemicals, primarily for the water treatment industry and use in other
industrial processes in Brazil.
“We are pleased to partner with Compass Minerals in Brazil’s specialty
plant nutrition and chemical market,” said Gerhard Schultz, President of
Produquímica. “This investment from a strong, U.S.-based company allows
us to accelerate our growth initiatives and benefit from the exchange of
knowledge between our two companies.”
Compass Minerals expects to close the transaction by the end of 2015,
and upon closing, Mr. Malecha and Matthew Foulston, Compass Minerals
chief financial officer, will join the board of directors of
Produquímica.
Produquímica At-A-Glance
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Headquartered in São Paulo, Brazil with eight manufacturing facilities
throughout Brazil
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Approximately 1,400 employees
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2015 estimated net revenue = R$1.0 billion
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2015 estimated EBITDA = R$180 million
*Earnings before interest, taxes, depreciation and amortization,
adjusted for special items.
To assist with funding this investment, Compass Minerals and certain of
its subsidiaries have entered into a $100 million incremental term loan
as part of an amendment to its existing senior secured credit facility.
The incremental loan is coterminous to the existing term loan maturing
in 2017 and carries an interest rate of LIBOR plus 1.75 percent.
A summary of the proposed acquisition can be found in a presentation
available on the company’s website at www.compassminerals.com/presentation.
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 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.
Certain statements in this press release the company’s or
management’s beliefs, expectations or opinions are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are those that predict or
describe future events or trends and that do not relate solely to
historical matters. We use 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. These risks, uncertainties and factors specific to
the investment in Produquímica include, but are not limited to: (i) the
occurrence of any event, change or other circumstance that would result
in the termination or delay of the proposed initial Produquímica
acquisition of the minority stake and/or full ownership by early 2019,
(ii) the inability to complete the proposed acquisitions due to the
failure of the company or Produquímica to satisfy any of the conditions
to the closing of the acquisition, including the failure to obtain
necessary financing, (iii) the risk that the proposed acquisition could
disrupt the plans and operations of the company, Produquímica or both,
and (iv) the risk that the company may not realize the expected
financial and other benefits from the proposed acquisition. For further
information on these and other risks and uncertainties that may affect
our business, see the “Risk Factors” sections of our Annual Report on
Form 10-K for the year ended December 31, 2014 and when filed, our
Annual Report on Form 10-K for the year ended December 31, 2015. 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151217005660/en/
Source: Compass Minerals
Compass Minerals
Investor Contact
Theresa L.
Womble, +1-913-344-9362
Director of Investor Relations
womblet@compassminerals.com
or
Media
Contact
Tara Hart, +1-913-344-9319
External Communications
Manager
MediaRelations@compassminerals.com