United Phosphorus in race for Arysta

United Phosphorus has been shortlisted for the second round of bidding for the world's largest privately held crop protection and life science company, Arysta LifeScience Corporation.

Sources close to the development said the Shroff family-owned United Phosphorus would put in a bid shortly. The competitive bidding process, they added, would take another month to complete.

The other bidders for the sale of Tokyo, Japan-based company included Tata Group's Rallis India, Israel's Makhteshim Agan Industries, Australia's Nufarm and a couple of private equity funds such as Bain Capital and Permira. The Arysta buy could cost the acquirer nearly $2 billion (Rs 7,860 crore) or double its last year's turnover of 124.1 billion yen (Rs 3,930 crore).

United Phosphorus informed the stock exchanges that it was bidding for an Asian agrochemicals company, without divulging the identity. "We have executed a confidentiality agreement which prohibits us from disclosing details of the target or the competitive bid process," the company said.

The financing of the acquisition would require "the issuance of equity as well as cash from operations, debt financing or any combination of these."

Private equity company Olympus Capital Holdings has put Arysta on the block. It has appointed investment banks, Goldman Sachs and Lehman Brothers to oversee the sale. Olympus bought 8.7 per cent of Arysta in 2002 for around $80 million. Since then, it has been gradually building up its stake.

Industry sources said the acquirer of Arysta would get access to its 150 products in more than 125 countries worldwide. United Phosphorus, which has been on an overseas shopping spree in the last few years, would have to stretch its balance sheet to seal the bid. On the other hand, Rallis would have to bank on the Tata Group's reputation and balance sheet to clinch the deal, they added

Arysta was formed by unification of the life science divisions of Tomen Corporation and trading company Nichimen Corporation, owned by Sojitz Holdings. Established in 2001, it has about 2,300 employees, including affiliated companies.