Oslo, 5 August 2014: Yara International ASA has entered into an agreement to
acquire a 60% stake in Galvani Indústria, Comércio e Serviços S/A ("Galvani"),
for an enterprise value of USD 318 million.
Galvani is an independent, privately held fertilizer company, controlled by Mr.
Rodolfo Galvani Jr., a Brazilian entrepreneur. The company is engaged in
phosphate mining, Single Super Phosphate (SSP) production and distribution of
fertilizers in the center and northeast of Brazil. Galvani also owns licenses
for two new greenfield phosphate mine projects in Brazil.
The acquisition is in line with Yara's strategy for growth in Latin America,
seeking to develop a production footprint in Brazil to complement its
established position, following the recent acquisition of the Bunge fertilizer
business in Brazil.
"This acquisition represents another significant step in realizing our Latin
American growth strategy, further establishing our position in Brazil as a long-
term industry player, committed to developing and investing in Brazilian
agribusiness," said J?rgen Ole Haslestad, President and Chief Executive Officer
"The Galvani acquisition will help secure phosphate fertilizer capacity in the
center of the country and in the attractive and fast growing agri frontiers of
Brazil. Furthermore Galvani brings excellent industry competence with cost-
effective solutions for mining, production, blending and warehousing
facilities," said J?rgen Ole Haslestad.
Galvani 2013 revenues amounted to USD 352 million, with an EBITDA of USD 48
The company has a total SSP production capacity of approximately 1 million tons
per annum through the industrial complex of Paulinia and Luis Eduardo Magalhaes.
Both sites source phosphate rock from two own mines, Lagamar and Angico dos
Dias, and the leased mine Irece. To cover future demand for phosphate rock,
Galvani has two greenfield and one brownfield mining project under development,
Salitre (greenfield): up to ~1,200,000 tons phosphate rock per annum
Angico (brownfield): additional ~150,000 tons phosphate rock per annum
Santa Quiteria (greenfield): up to ~800,000 tons phosphate rock per annum
In addition to phosphate rock production, the projects under development include
new upgrading capacity for phosphate fertilizer. Start-up for the various
projects is expected between 3 and 5 years from closing date.
The enterprise value of USD 318 million for 60% of Galvani comprises USD 132
million for the existing business and USD 186 million for the mining/production
projects, and will be adjusted for any deviation from normalized working capital
(USD 42 million) at the time of closing. As part of the agreement, Yara will
also, based on certain conditions, inject a total of USD 165 million as equity.
With Yara's share of the company's debt being USD 93 million, the resulting
total equity exposure for Yara will be USD 390 million. Furthermore, given
certain project-related conditions are met, the agreements with Galvani will
commit Yara to support the company's development of three specific mining and
associated production projects with a total capital expenditure of USD 920
million (Yara's share USD 552 million) until 2019, the funding of which will be
decided based on maximizing value for the company.
To reflect the uncertainty of the future projects, the agreement includes
several risk reduction elements such as payment conditional upon successful
project studies and milestones as well as guarantees related to capital
expenditures and operating expense levels.
The transaction is subject to the approval of Brazilian competition authorities
(CADE) and other customary approvals. Closing is expected to take place in
fourth quarter this year.
Thor Gi?ver, Investor Relations
Cellular (+47) 48 07 53 56
Esben Tuman, Corporate Communications
Cellular (+47) 90 50 84 00
Yara delivers solutions for sustainable agriculture and the environment. Our
fertilizers and crop nutrition programs help produce the food required for the
growing world population. Our industrial products and solutions reduce
emissions, improve air quality and support safe and efficient operations.
Founded in Norway in 1905, Yara has a worldwide presence with sales to 150
countries. Safety is always our top priority.
This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.
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Source: Yara International ASA via GlobeNewswire