Shares in Nufarm Limited (ASX: NUF) are up 2.64% to $8.34, on the news that the acquisition of the Century portfolio from Adama Agricultural Solutions Ltd and Syngenta AG will be completed by next week, following approval from European regulators.
The Century portfolio includes over 50 crop protection formulations registered for use in Europe. Nufarm expects this acquisition to boost its revenue by about $250 million and to increase EBITDA by approximately $100 million. Nufarm will pay US$490 million, plus a US$50 million consideration for existing inventory, funded via existing debt facilities and a fully underwritten equity raising.
According to the Nufarm's 2017 full year results, Europe accounted for 18% of the company's sales, but was the only geographic segment that contributed negatively to Nufarm's revenue growth in the period.
With this move, Nufarm continues diversifying its offer in Europe, following the acquisition of another US$85 million herbicide portfolio from FMC Corporation. The European pesticides market is undergoing a process of concentration and Nufarm wants to take full advantage of it, particularly when considering both portfolios it's acquiring are being divested by its competitors to comply with EU competition law.
