Israel Chemicals Ltd. (TASE: ICL) is buying the Scotts' Global Professional business from The Scotts Miracle-Gro Company (NYSE: SMG) for $270 million. Global Pro is a global provider of specialty fertilizers and horticultural and turf specialty products. Israel Chemicals will finance the acquisition from its own resources, and expects to close the deal during the first quarter of 2011.
Scotts' Global Professional had non-GAAP earnings before interest, taxes, depreciation and amortization (EBITDA) of $31.4 million on $242 million revenue in the fiscal year ended September 2010. The company's customers include commercial nurseries, greenhouses and specialty crop growers in the Americas, Europe, Kenya, the Far East, and Australia. Its products include a broad line of proprietary high-quality controlled-release fertilizers (CRF), slow release fertilizers, water-soluble fertilizers (WSF), plant protection products, wetting agents, growing media and grass seeds, sold under well-known brand names, including Osmocote, Sierrablen, Peters Professional and others.
Israel Chemicals will acquire Scotts' Global Professional's brands, products, employees, R&D resources associated with business as well as its facilities, including three factories in the US, UK, and the Netherlands, and three peat mines in the UK. Israel Chemicals plans to merge these activities into its fertilizers division.
One of Scotts' Global Professional's key assets is its global technical sales and marketing force, which accounts for over 200 of its 340 employees, and its strong research and development capability.
Israel Chemicals EVP corporate development Yossi Shahar said, "Israel Chemicals' interest in Scotts' Global Professional business, a well known brand in specialty fertilizers, derives from our intention to increase our focus on environmentally-important fields whose growth is being accelerated by global trends. This acquisition will establish Israel Chemicals as the leading player in certain specialty fertilizers and specialty inputs markets in which we have been active for many years. Scotts' Global Professional business is an excellent complement to our existing specialty fertilizers capabilities that will give us a broader portfolio of branded, environmentally-friendly products, an international platform for growth, stronger R&D capabilities and significant additional marketing expertise."
Israel Chemicals SVP ICL Specialty Fertilizers Yossi Zidon said, "We believe that the significant advantages the acquisition of Scotts' Global Professional will provide us, together with the synergies that we expect to achieve and our existing global platform, will enable us to accelerate the growth and profitability of our Specialty Fertilizers business unit, and to establish the combined company as a $500 million specialty fertilizers and horticultural/turf inputs powerhouse."
Israel Chemicals share price rose 0.7% in early trading to NIS 56.58.
Published by Globes [online], Israel business news - www.globes-online.com - on December 7, 2010
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