ICL acquires Brazilian company for fertilizers and plant supplements for $...

ICL acquires Brazilian company for fertilizers and plant supplements for $...
ICL acquires Brazilian company for fertilizers and plant supplements for $...

ICL Group(Formerly ICL) reported today (Monday) that it has signed a binding agreement to acquire a Brazilian company for the production of fertilizers and food supplements for plants called Agro Fertilaqua Byticipações for $ 120 million. The acquisition is expected to materialize during the first quarter of 2021, subject to approval of the transaction by Brazilian regulatory institutions.

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ICL notes that Agro Fertilaqua serves about 500 customers throughout Brazil, employs about 350 people, and operates 2 manufacturing sites alongside 2 research and development centers. The company’s main sales are food supplements for soybeans, corn and sugar cane crops, which are the main agricultural crops in Brazil, and market estimates are that its annual revenues range from $ 40-30 million.

ICL also said that Agro Fertilaqua’s annual growth rate is about 15%, and it expects that with the acquisition it will be able to increase its presence in the Brazilian market and leverage the sale of its products with its help.

ICL has recently been examining the expansion of its activity in the Brazilian agricultural market, which is growing at an annual rate of 5% -7%, compared to the growing US and European agricultural markets at an annual rate of 1% -2%. ICL, whose main sales in Brazil are due to potash, became interested in Agro Fertilaqua about two years ago, when it began to be exposed to its latest products.

Raviv Zoller, President and CEO of ICL Photo: Natalie Cohen Kadosh

The company also recorded a decline in the profitability of its main activity and began working to locate companies for acquisition in the fields of agro-tech and digital agriculture. At its most recent investor conference about a month ago, the company presented expected revenue and profit as a result of acquisition activity that will add up to $ 500 million to its revenue by 2025 and an increase of about $ 150 million to EBITDA for that period.

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ICL revenue for the second quarter of the year was $ 1.2 billion compared to $ 1.42 billion in the second quarter of 2019, and the accounting net loss was $ 168 million or $ 0.13 per share compared to net income of $ 158 million or $ 0.12 per share in the corresponding quarter.

ICL, which is controlled by the Israel Corporation (45.85%), is traded on the Tel Aviv and New York US stock exchanges worth $ 4.7 billion, and its share has fallen by 21.01% since the beginning of the year.

Raviv Zoller, President and CEO of ICL: “The expected growth in our fertilizer operations, both organically and through mergers and acquisitions, will be supported, among other things, by increased demand for specialty fertilizers and our focus on emerging markets. Fertiláqua provides ICL with a significant foothold in a large market, where the growth in demand for specialty fertilizer products is accelerating. In addition, it immediately creates synergies with our distribution capabilities in Brazil and adds to ICL’s product range many more products with higher growth rates and margins. It will also provide a seasonal balance in our special fertilizer sales between the northern and southern hemisphere. ”

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