By SIMON CASEY and DAVID WELCH
Platform Specialty Products, a chemicals company co-founded
by billionaire Nicolas Berggruen and backed by hedge fund
manager Bill Ackman, agreed to buy Chemtura's agrochemicals
business for about $1 billion.
Chemtura will get about $950 million in cash and 2 million
shares of Platforms common stock, Miami-based Platform
said in a statement. The purchase is expected to be funded
through a combination of debt and cash on hand and will close
in the second half of the year, it said.
The deal is the second to be announced since Platform first
sold shares to the public in May. It bought closely held
MacDermid Group for $1.8 billion in October. In a conference
call to discuss that deal, Platform co-founder and chairman
Martin E. Franklin, said it planned to acquire a
portfolio of companies and was targeting makers
of chemicals used in oilfield services, adhesives, energy
catalysts and water treatment.
The Chemtura units products include insecticides,
herbicides and fungicides. Last year it had adjusted earnings
before interest, taxes, depreciation and amortization of $101
Platform still plans to acquire more companies and is focused
on makers of blended chemicals, CEO Dan Leever said in a
phone interview. Blended-chemical plants can have costs of
about 10% of factories that make the virgin chemicals used in
blending, he said.
Lower capital costs help improve Platforms cash flow,
Leever said, so that it can continue to do more acquisitions,
either smaller companies or larger deals like Chemtura.
We have a big appetite, he said.
Ackmans Pershing Square Capital Management is the
largest shareholder in the company with a 28% stake,
according to data compiled by Bloomberg.
Barclays and Lazard are Platforms advisers on the deal
and Greenberg Traurig is its legal adviser. Barclays is also
providing financing. Morgan Stanley is Philadelphia-based
Chemturas financial adviser and Debevoise &
Plimpton is its legal counsel.