June 28, 2010

Israel's Makhteshim to acquire US agrochem firm

The Makhteshim Agan Group will buy US firm Albaugh for about US$1 billion to bolster its presence in the Americas and solidify its position as the world's biggest generic agrochemical manufacturer.

Makhteshim said it had signed a letter of intent to pay US$340 million in cash, US$455 million in seven-year promissory notes and 59 million of its own shares equivalent to a 12% stake worth US$211 million. Both boards have already approved the deal.

The acquisition of Albaugh, a private company based in Iowa, is expected to close in the fourth quarter and be profitable within a year of closing - on a non-GAAP basis. Albaugh's financial debt will not exceed US$280 million, Makhteshim said in a statement. The deal is subject to the completion of due diligence and regulatory approvals in the US, Europe and other countries.

Albaugh is a leading generic crop protection company in the US, Mexico, Argentina and Brazil. Dennis Albaugh, the chairman and CEO, is currently the firm's sole owner.

Makhteshim is a subsidiary of Koor Industries, which is part of Nochi Dankner's IDB Holding. It had sales of US$2.2 billion in 2009.

The combined company will have the potential to realise US$50-US$60 million in synergies, said Makhteshim.