Platform Specialty To Sell Agricultural Solutions Unit To UPL For $4.2 Bln

(RTTNews) - Platform Specialty Products Corp. (PAH) said that it agreed to sell its Agricultural Solutions business, which consists of Arysta LifeScience Inc. and its subsidiaries, for $4.2 billion in cash to UPL Corporation Ltd.

The transaction is expected to close in late 2018 or early 2019 upon satisfaction or waiver of the closing conditions. In the context of this transaction, Platform also announced a planned name change and pro forma financial guidance.

Platform plans to change its name to Element Solutions Inc., effective at closing of the Arysta transaction. Element expects to be traded on the New York Stock Exchange under the ticker symbol "NYSE:ESI."

The newly named company will comprise the existing Performance Solutions segment of Platform, a portfolio of specialty chemicals businesses focused on attractive segments in the electronics, industrials and energy end-markets. Element intends to continue to focus on organic growth from its core portfolio as well as measured opportunistic acquisitions to build its capabilities, technologies and product offerings in its existing and adjacent end-markets.

Platform expects net cash proceeds of approximately $4.2 billion from the sale of Arysta, which Element plans to use primarily to pay down existing debt. At the closing of the Arysta transaction, Element expects to have net debt of less than $1 billion or less than 2.5 times pro forma trailing twelve month adjusted EBITDA.

The Board has authorized up to $750 million in share repurchases, conditioned on the closing of the Arysta transaction.

In the context of the Arysta transaction and the formation of Element Solutions, Platform intends to merge its corporate functions with those of its Performance Solutions segment. The divestiture of Arysta and this related reorganization are expected to generate approximately $25 million of estimated annual run-rate cost savings in the next 12 to 18 months.

Based on Platform's previously-announced 2018 adjusted EBITDA guidance and adjusting for the Arysta transaction as well as the annualized cost savings from the related reorganization, Element expects pro forma adjusted EBITDA from continuing operations to be in a range of $450 million to $470 million on an annualized basis. Going forward, Elements Solutions expects to be positioned to grow adjusted EBITDA in the high-single digits annually.

Effective August 15th 2018, Nichelle Maynard-Elliott will join the Platform Board of Directors. Maynard-Elliott currently serves as the Executive Director of Mergers & Acquisitions at Praxair, Inc. Prior to joining Praxair in 2003, Ms. Maynard-Elliott was a practicing lawyer.