The investment bank sees Arysta’s buyout as the catalyst.
Merrill Lynch says that the acquisition of Japan’s Arysta LifeScience Corporation by Permira private equity fund for $2.2 billion will force the company’s competitors in the generic agrochemicals industry, including Makhteshim Agan Industries Ltd. (TASE: MAIN) to consolidate. The acquisition is a catalyst and put pressure of the other generic manufacturers. The investment bank says that the price tag for Arysta reflects a very attractive price tag for Makhteshim Agan.
Merrill Lynch says, “We see Makhteshim Agan and United Phosphorus Inc. as the predators, and Australia’s Nufarm Ltd. (ASX:NUF) as prey. However, Makhteshim Agan’s balance sheet cannot support an acquisition of that size. It will be too much to swallow. We are looking for Makhteshim Agan to make an acquisition in the hundreds of million range, no more.”
Merrill Lynch gives Makhteshim Agan a target price of $36.
Published by Globes [online], Israel business news - www.globes.co.il - on October 23, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007