Agrium Inc. announced today that it has concluded the purchase of certain fixed assets and inventory of Pursell Technologies Inc. and certain of its affiliates (PTI) for a purchase price of $74.5-million (U.S.). Agrium has received regulatory approval for the PTI acquisition.
"We believe that our combined technological expertise in polymer coating will further enhance our strong position in controlled release fertilizer products and make ESN available more quickly, to more markets, at a lower cost," said Mike Wilson, Agrium President and CEO. ESN (R) is Agrium's environmentally friendly, polymer-coated fertilizer targeted to commodity agriculture.
"The PTI acquisition significantly enhances Agrium's ability to service the growing and environmentally friendly specialty fertilizer markets. We now have a more complete line of specialty fertilizer products, access to new marketing channels, and the strongest customer relations team in the business," continued Mr. Wilson.
The PTI assets, Nu-Gro and Agrium's pre-existing specialty products will be combined to create a new Specialty Products Business Unit to optimize the stable and growing earnings from this segment. The acquired assets will be operated under the name Agrium U.S. Specialty Products.
Full-year 2006 EBITDA from the acquired PTI assets is expected to be approximately $10-million. We expect to capture future synergies from combining the PTI assets, Nu-Gro and Agrium's pre-existing specialty businesses, including the research and development of controlled release fertilizers.
Agrium's specialty fertilizer product line will now include those formerly produced and marketed by PTI including Polyon(R) polymer coated fertilizers, Trikote(R) polymer sulphur coated fertilizers and Precise(R) controlled release crop protection products. Agrium will also own and operate the Sylacauga, Alabama production, research and development facility.
In addition, Agrium has purchased patented technology for emerging non-fertilizer controlled release products, such as specific crop protection products, for the consideration of $12.5-million plus contingent payments based on a percentage of future sales.