Compass Minerals Buys Stake in Brazilian Co. - O'Keeffe and O'Malley

Compass Minerals Buys Stake in Brazilian Co.

Dec 17, 2015

Overland Park, KS-based Compass Minerals International, Inc. has signed a definitive agreement to purchase a 35 percent stake in Produquimica Industria e Comercio S.A., one of Brazil’s leading manufacturers and distributors of specialty plant nutrients. The all-cash transaction valued at approximately $120.7 million is subject to customary post-closing adjustments. This agreement also includes a path to full ownership by early 2019.

“We are excited to enter one of the world’s largest and most important agricultural markets with Produquimica,” said Fran Malecha, Compass Minerals president and CEO. “Produquimica has a long history in Brazil and strong prospects for continued growth and margin expansion. Its wide range of specialty plant nutrients, application technologies, and extensive distribution network, are uniquely positioned to meet growers’ need for yield enhancement. Produquimica is a good strategic fit with our existing plant nutrition business, and this investment is an important part of our growth plan.”

Based in São Paulo, Brazil, Produquimica’s agricultural productivity division manufactures and distributes a broad offering of specialty plant nutrition solution-based products. These include micronutrients, controlled release fertilizers, and other specialty supplements that are used in direct

soil and foliar applications, as well as through irrigation systems and for seed treatment. Produquimica also manufactures and markets specialty chemicals, primarily for the water treatment industry and use in other industrial processes in Brazil. There are eight manufacturing facilities throughout Brazil.

The company employs approximately 1,400 people.

“We are pleased to partner with Compass Minerals in Brazil’s specialty plant nutrition and chemical market,” said Gerhard Schultz, President of Produquimica. “This investment from a strong, U.S.-based company allows us to accelerate our growth initiatives and benefit from the exchange of knowledge between our two companies.”

Compass Minerals produces salt, plant nutrients and magnesium chloride for distribution primarily in North America. The company also provides secure records storage in a retired mine in the U.K. Products from Compass Minerals serve a variety of applications in industrial, agricultural, commercial and consumer markets.

Compass expects to close the transaction by the end of 2015, and upon closing, Mr. Malecha and Matthew Foulston, Compass Minerals chief financial officer, will join the board of directors of Produquimica.