UPL buys US company Arysta Life for $4.2 billion

MUMBAI: In one of the largest overseas deals by India Inc in recent years, chemicals producer UPL (formerly United Phosphates) on Friday teamed up with Abu Dhabi Investment Authority and TPG to snap up Florida-based Arysta LifeScience for $4.2 billion in an all-cash deal.

The transaction will enhance the position of UPL as a global leader in the agriculture solutions market and make it a $5-billion entity in combined sales, offering it a $200-million savings through operational synergies.

The tie-up will see Abu Dhabi Investment Authority, which is the world’s second-largest sovereign wealth fund, and private equity major TPG Capital infusing $1.2 billion into UPL Corporation, the Mauritius-based international arm of UPL and the acquirer company, and will collectively own 22%.

These new investors will infuse $600 million each, UPL said in a statement. Though known for acquisitions, Arysta is UPL’s largest bet. Once completed, it will make UPL the world’s fifth-largest crop-protection company with the top three being Bayer, DuPont and Syngenta.

It will also be the biggest generic player with a combined revenue of $5 billion. Currently it is the ninth-largest player.

UPL vice-chairman Vikram Shroff said the all-cash deal was signed between UPL Corporation and the Florida-based, NYSE-listed Platform Specialty Products Corporation’s farm pesticides business under Arysta Life Science brand and its subsidiaries.

Platform is a leading chemical maker and Bill Ackman’s Pershing Square Capital Management is its biggest stakeholder with 14% stake. Its subsidiary Arysta is a global provider of innovative crop protection solutions, including bio solutions and seed treatment.

Arysta was formed through a combination of Arysta Life Science, acquired by Platform in February 2015 and two additional crop protection chemical companies, Agriphar and Chemtura Agro Solutions of Chemtura Corporation, acquired by Platform in 2014.

For the year to March 2018, Arysta reported an operating revenue of $2 billion and operating profit of $424 million.

For the rest of the funding gap, UPL has tied up a clutch of lenders to raise $3 billion to fund the debt-driven deal.