All Posts from March 20, 2014

Compass Minerals acquires Canadian micronutrient company

Compass Minerals, Overland Park, Kan., reported on March 20 that it has signed a definitive agreement to acquire Wolf Trax Inc., a micronutrient company headquartered in Winnipeg, Manitoba. The all-cash transaction is valued at C$95 million (US$85 million), subject to customary post-closing adjustments. Compass Minerals will fund the purchase with cash on hand.

“Wolf Trax^® brand products are well recognized by fertilizer customers for the differentiated technology they bring to the application of micronutrients,” said Fran Malecha, Compass Minerals president and CEO. “This acquisition will position us for future growth with new products that serve a greater diversity of crops and geographies in a fast-growing segment of the plant nutrition market.”

Compass Minerals said Wolf Trax brand micronutrients are formulated to coat and adhere to each prill of dry fertilizer, providing a more precise and effective way of delivering nutrients such as boron, zinc, copper, and manganese directly to the plant. Wolf Trax generated sales of approximately C$20 million in 2013.

“Both Wolf Trax products and Compass Minerals’ sulfate of potash products offer customers a compelling value proposition,” said Malecha. “With Wolf Trax’s strong product development and value-added sales capabilities, we will become the go-to source for premium plant nutrition products.”

In addition to sulfate of potash specialty fertilizer which it sells to customers worldwide, Compass Minerals also produces magnesium chloride and salt, including highway deicing salt marketed to customers in North America and the United Kingdom. The company also produces consumer deicing and water conditioning products, ingredients used in consumer and commercial foods, and other mineral-based products for consumer, agricultural, and industrial applications.

ICL workers protest layoffs, executive pay

Over 1,000 Israel Chemicals Ltd.’s workers protested on March 20 outside of the company’s headquarters in Tel Aviv against planned layoffs at the company as part of a restructuring plan. The union protested the payment of millions of dollars to senior management at a time when the company was planning to fire workers. ICL published its 2013 results and with it figures on salaries paid to senior management. ICL CEO Stefan Burgos received over $5 million in compensation, making him the highest paid executive at an Israeli company and 51 percent higher than his predecessor Akiva Mozes. The union charges the management with wanting to lay off as many as 1,000 workers. Management said that the restructuring plan will lead to 500 to 600 layoffs over the next two-to-three years along with other cost saving measures.

Workers have been implementing sanctions on a rotating basis at ICL’s six subsidiaries. Hardest hit has been Rotem Amfert which has been shut down for the past week. Rotem Amfert CEO Nissim Arad issued an open letter to workers earlier this week saying that the shut down is causing tremendous damage to the company. He noted that Rotem Amfert’s position in the world market will be impacted and customers will turn elsewhere. Arad said that management has been trying for months to negotiate with the workers but of no avail and the union has failed to understand the gravity of the situation.

The Rotem Amfert workers have been the most militant as they are facing immediate layoffs. Management is trying to immediately fire 23 workers and a total of 127 in the coming weeks. ICL management said that it has offered a generous severance package and called on the workers to return to the negotiating table.

LSB settles emissions case

LSB Industries Inc., the largest merchant manufacturer of concentrated nitric acid in North America, and four of its subsidiaries have agreed to reduce harmful emissions of nitrogen oxides (NOx) by meeting emission limits that are among the lowest for the industry in the nation at plants in Alabama, Arkansas, Oklahoma and Texas, the U.S. Environmental Protection Agency (EPA) and Department of Justice have announced.

EPA estimates that the measures required by the settlement will reduce NOx emissions by more than 800 tons per year, directly benefitting surrounding communities, which include low-income and minority populations living near the Arkansas and Texas plants. The companies estimate that it will cost between $6.3 and $11.7 million to implement the measures required by the settlement.

“This case is about cleaner air for people living in communities near manufacturing plants,” said Cynthia Giles, Assistant Administrator of EPA’s Office of Enforcement and Compliance Assurance. “LSB Industries has committed to dramatic cuts in air pollution and ensuring they are in compliance with the law. We expect others in the industry to recognize the imperative to adopt reforms and reduce pollution in communities where they operate.”

LSB and its four nitric acid producing subsidiaries will also pay a total penalty of $725,000 to resolve alleged violations of the Clean Air Act and applicable Oklahoma state law. In addition to paying the penalty, the companies must continuously monitor emissions and make any necessary operational improvements such as installing new pollution controls or upgrading current controls to meet the new NOx limits.

The settlement applies to the ten nitric acid manufacturing plants owned or operated by the following Oklahoma City-based LSB subsidiaries: El Dorado Chemical Co., in El Dorado, Ark. (four plants); Cherokee Nitrogen Co. in Cherokee, Ala. (two plants); El Dorado Nitrogen Co. in Pryor, Okla. (three plants); and El Dorado Nitrogen Co. in Baytown, Texas (one plant).

The complaint, filed concurrently with the settlement, alleges that the Cherokee, El Dorado and Pryor subsidiaries constructed or made modifications to their plants that resulted in increased emissions of NOx without first obtaining pre-construction permits and installing pollution controls. The complaint does not allege any violations regarding the Texas facility.

The companies have also agreed to spend $150,000 to remediate and reforest ten acres of land with acidified soils located near El Dorado, Ark. NOx emissions, such as those from nitric acid plants, can contribute to soil acidification. The project will help to minimize erosion, reduce stormwater runoff, improve habitat for wildlife and capture carbon dioxide, a greenhouse gas.

The States of Oklahoma and Alabama are co-plaintiffs in today’s settlement and will receive a portion of the total penalty as follows: $206,250 will be paid to the Oklahoma Department of Environmental Quality and $156,250 will be paid to the Alabama Department of Environmental Management.

Rentech activist shareholders seek special meeting

Concerned Rentech Shareholders, a group led by Engaged Capital LLC and Lone Star Value Management LLC, together one of the largest stockholders of Rentech Inc., said March 20, that they intend to solicit fellow shareholders of RTK for the written requests to call a special meeting of shareholders to amend the company’s charter. The amendment seeks to require the company to obtain the approval of shareholders prior to issuing dilutive equity or equity-linked securities greater than 5 percent of the outstanding shares of the company, except in limited circumstances such as a public offering.

"It appears the board and management of RTK are planning a dilutive capital raise against, we believe, strong shareholder opposition. It is clear to us that management and the board are acting contrary to the shareholders’ interests and further disenfranchising shareholders and entrenching themselves. A special meeting of shareholders to consider the amendment proposal, is urgently required to reign in the company’s poor capital allocation that, in our view, has become a hallmark of this board and management team. Shareholders have the right to an opportunity to stop future issuances of equity or equity-linked capital before the board acts unilaterally and without the support of the company’s owners. The special meeting will give shareholders the voice they need to make sure this board and management team cannot act recklessly with our capital." stated Glenn Welling, chief investment officer of Engaged Capital.

CRS said the written support of shareholders who own at least 10 percent of the issued and outstanding shares of the company is required in order to call a special meeting of shareholders to consider the amendment proposal. Once this special meeting is called, CRS plans to send proxy materials to shareholders soliciting votes in favor of the amendment proposal as described in the solicitation statement. CRS has made a preliminary filing with the United States Securities and Exchange Commission of a solicitation statement to call a special meeting of shareholders to amend the charter of the company.