ICL has completed the acquisition of Brazilian Compass Minerals for a value of $ 420 million

ICL has completed the acquisition of Brazilian Compass Minerals for a value of $ 420 million. The transaction includes a payment of $ 300 million for the shares of the acquired company, and a debt of $ 100 million of Compass that ICL will take on.
ICL (ICC), managed by Raviv Zoller, is six to eight weeks early in completing the transaction, so it will be able to consolidate Compass' results into a profit and loss statement - and enjoy the fruits of the transaction from the beginning of the third quarter. Mercury is not negligible, because the agricultural season begins in Brazil in July and the third quarter of the year accounts for about a third of the annual sales and profits of the acquired company.
Compass Minerals' acquired plant nutrition business is a leader in Brazil and competes with Stoller, Agrichem and Vittia. The acquired business is based on Produquimica, which Compass acquired in 2015 and 2016 for $ 586 million - and has grown since its acquisition at an annual rate of 10%. The company is engaged in the production and marketing of controlled release fertilizers, micronutrients (plant nutrients that are consumed in small amounts such as zinc and magnesium, and improve processes such as photosynthesis) to fertilize the soil and fertilize plant foliage, biostimulants. To the roots, the resistance of the plant to drought and heat and the quality of the crop) - and auxiliaries for plant protection.
The company is active in 25 of the 26 countries in Brazil and serves 32,000 farms. 50% of its revenue comes from direct sales to farmers. Compass, based in Sao Paulo, employs 1,000 people and operates six production sites and a research and development center in Brazil. Compass posted sales of $ 284 million and cash flow operating income (Ebitda) of $ 46 million in 2020. The Brazilian company has grown by 5% -10% per year for the past four years, and is expected to record a 20% increase in cash flow operating profit in 2021.
Compass's relatively high profitability is explained by the fact that it manufactures and markets specialty fertilizers that are relatively profitable for products sold as commodities, such as potash and phosphate fertilizers, and by the fact that it markets 50% of its turnover directly to farmers and thus reduces intermediation gaps. It is estimated that the level of provisions for Compass' doubtful debts is minimal despite the fact that the agricultural input market in Brazil is characterized by long credit to farmers and high risk due to the economic instability in the country. The low level of doubtful debts has been achieved thanks to an underwriting scheme of farmers that may assist ICL in marketing other products in Brazil.
With the acquisition of Compass, ICL's sales level in Brazil will reach $ 800 million per year, making it one of the company's three largest markets alongside the US and China. A debt of $ 40 million - which ICL took on.
Partilacawa develops, manufactures and markets fertilization and nutrition solutions that are relevant to the entire life cycle of the plant, and deals with solutions for soil regeneration, seed treatment and plant health in all major growing areas in Brazil. It employs 350 people at two manufacturing sites and two research and development centers, and is growing at an annual rate of 15%.