Croda Europe, part of the UK multinational chemicals business Croda International, is to purchase the entire share capital of Plant Impact with the agreement of both company boards. Croda says the deal, which is subject to shareholder approval, will enhance its Life Sciences division
Plant Impact has been seeking a buyer since late last year, after running into cash flow difficulties following Bayer’s deferment of product purchases related to a distribution arrangement between the two companies in Brazil. The company was established in 2005, moving in 2013 to become the first tenant at the Rothamsted Centre for Research and Enterprise (ROCRE)and has since opened offices in the US, Brazil, Argentina and West Africa. It saw a 17% increase in revenues to £3.5m in the year to July 31st 2017, and 18% in gross profit to £6.7m, but after costs that included R&D costs and a restructure of Europe, Middle East and Africa operations, it made a net loss of £3.1m.
Croda, based in Goole in East Yorkshire, had group revenues of £1.44 billion in 2016. Its LifeSciences division, which generated £292.2 million in 2016 sales, makes sustainable chemical products for the health care and crop protection sectors. In 2015, Croda completed the acquisition of the Dutch multinational seed care business Incotec.
The company says that Plant Impact’s portfolio of products and customer base are both complementary to its own and will allow Croda to extend its global presence. At the same time Croda will build on Plant Impact’s R&D expertise with its own facility in formulating adjuvants and products for plant and seed protection. Croda expects the Plant Impact operation to remain at its Rothamsted Research base in Hertfordshire with its present employees, although chief executive John Brubaker is expected to leave the business within three months of the deal completing.
“I’m delighted to be announcing Croda Europe’s intention to purchase Plant Impact,” states group chief executive Steve Foots. “This is high quality, novel technology that further expands our position in the crop care sector, and supports our strategy of investing in high growth markets and world leading technologies. Plant Impact has assembled a great team, and we’re really excited by the prospect of working with them to accelerate development of this business.”
Plant Impact chairman David Jones adds: “Following the announcement of a 2018 revenue shortfall and the severe challenge this poses to the company, the Board has reviewed its strategic options in parallel with conducting a wide ranging formal sale process. It has concluded that the best interests of the shareholders are served by selling the company now whilst it remains able to support its trading activities from its remaining cash reserves. Furthermore, the Board believes that Croda’s plan for Plant Impact and Croda’s current expertise and market position in agricultural chemistry is a firm basis for Plant Impact to fulfil the promise that we have consistently described for it and will therefore provide a more secure future for employees and other stakeholders in the Plant Impact Group.”