UPL's $4.2 bn purchase of ArystaLifeScience to deepen its global footprint

TPG joins hand with Abu Dhabi Investment Authority to back the transaction, JP Morgan is deal adviser

UPL Ltd announced on Friday that its wholly-owned subsidiary, UPL Corporation Ltd, has signed a definitive agreement with Platform Specialty Products Corporation to acquire ArystaLifeScience Inc. and its subsidiaries for a cash consideration of about $4.2 billion.

Tokyo-headquartered ArystaLifeScience is a global provider of innovative crop protection solutions, including bio-solutions and seed treatment. A wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) and TPG have partnered with UPL Corp to support the proposed acquisition. The deal is subject to customary closing conditions and regulatory approvals.

This acquisition will create New UPL and fulfil the company's objective of creating an integrated patent and post-patent agricultural solutions business with a global footprint. New UPL will represent a compelling value proposition for growers, distributors, suppliers and innovation partners in a consolidating market.

“The acquisition of Arysta is a transformational transaction for UPL. Arysta has a differentiated position in the crop protection market, given its focus primarily on specialty applications and tailored local solutions. This is in line with our long-term vision of becoming a premier global provider of agricultural solutions designed to secure the world’s long-term food supply,” said Jai Shroff, Group Chief Executive Officer and Executive Director of UPL.

Following the acquisition, UPL will be one of the world’s largest global crop protection companies, with an innovative and differentiated product portfolio. The company will be able to offer a complete basket of solutions for various arable and specialty crops, consisting of crop protection chemicals, bio-solutions and seeds covering the entire crop value chain from planting to post harvest.

The acquisition will give UPL access to a variety of patented products through collaborations and partnerships, as well as enhanced in-house R&D capabilities. UPL will have an integrated supply chain with a backward-integrated manufacturing base in major markets and deep distribution capabilities across the globe to address needs of growers.

“This transaction is a “perfect match" with powerful synergies across geographies, crops and products, strengthened through best-in-class manufacturing and differentiated R&D capabilities. We are bringing together two winning teams with strong values and successful track records to create a strong platform for our mission of Farmer First and sustainable growth. New UPL will focus on making agriculture more sustainable and farmers more resilient to impact of climate change and is committed to speeding progress towards the UN’s 2030 sustainable development goals,” Shroff added.

“We decided to spin out our businesses last year in order to position both the performance solutions and agricultural solutions businesses for future growth and additional compelling value creation opportunities. This transaction with UPL creates an agricultural chemicals powerhouse with highly complementary capabilities,” said Martin E Franklin, Chairman of Platform.

The transaction is backed by a $1.2 billion equity investment from ADIA and TPG which will each invest $600 million for a combined stake of around 22 per cent in UPL Corp.

UPL Corp has received debt financing commitments of $3 billion for the balance of the consideration, with bullet maturity of five years, from MUFG Bank Ltd and Coöperatieve Rabobank U.A.

“The combination of Arysta and UPL, two remarkably complementary companies, will create a new paradigm in the crop protection market with an efficient supply chain and formulation innovation capabilities. This new company is positioned to provide deep and wide local customer solutions and selling presences for broad acre and niche crops and markets, and a leading bio-solutions business.  With its scale and capabilities, we believe the combined companies will represent a compelling value proposition for growers, distributors, suppliers and innovation partners in a consolidating market,” said Rakesh Sachdev, Chief Executive Officer of Platform.