Nutrien Ltd., Saskatoon, on Jan. 5 announced that it has entered into a definitive agreement to purchase 100 percent of the equity of Actagro, LLC (Actagro), Fresno, Calif., a developer, manufacturer, and marketer of environmentally sustainable soil and plant health products and technologies. Nutrien said Actagro’s premier commercial portfolio includes approximately 30 specialty products that have a strong track record of increasing crop productivity and financial returns for growers.
Actagro’s products are produced at two U.S. manufacturing facilities located in Biola, Calif., and Osceola, Ark., and are distributed across global agricultural markets through numerous retailers and distributors. To date, distribution has been focused on North America, Europe, Asia, and Australia.
Nutrien’s Retail business is Actagro’s largest customer, and has been doing business with the company for 10 years. In 2014, Nutrien predecessor Agrium Inc.’s Loveland Products Inc. entered into a commercialization and technology development agreement for soil and plant health nutritional products based on Actagro’s Organic Acids Technology Platform™ (GM Sept. 29, 2014). The agreement gave Loveland, a provider of crop input products for Agrium’s Retail division, expanded distribution, commercialization, and development rights to the platform in the Eastern U.S., Canada, and Australia.
The acquisition also includes Actagro’s research and development team, as well as a near-complete, world-class research and development facility located in California that will support the continued development of soil and plant health technologies.
Nutrien said Actagro will be included in the company’s Retail segment. Actagro has some 100 employees.
“The acquisition of Actagro is aligned with Nutrien’s strategy to invest in higher-margin proprietary products that provide strong value for growers,” said Nutrien President and CEO Chuck Magro. “Actagro has a strong track record of developing and manufacturing high-value crop nutrition products, and we see a significant opportunity to expand the business by leveraging the global reach of our Retail network and the expansion of Actagro’s strong relationships with domestic and international distributors. Nutrien will continue to use its strong balance sheet and cash flow to prudently allocate capital towards growth opportunities that create value for our customers and our shareholders.”
The purchase price is US$340 million, including approximately US$20 million in working capital, and is expected to be accretive to earnings in the first year. Nutrien expects the business to generate approximately US$55 million in run-rate EBITDA two years after close with the realization of synergies and organic growth opportunities. Closing of the transaction is subject to U.S. regulatory approval and is expected to be completed in the first half of 2019.
Actagro LLC began operations in September 1997 when it acquired the assets of Actagro Inc., which was founded as Pacific Micro Minerals in 1980 (GM April 21, 2008).