Sharechat Logo

Nufarm spends US$55.2 mln on American seeds researcher and producer

Thursday 1st December 2011

Text too small?

Nufarm, the Australian agriculture chemicals maker, spent US$55.2 million buying a Minnesota-based sunflower seeds researcher and producer, just one week after it secured a A$625 million bank facility to refinance a one-year loan.

The Melbourne-based company’s Nuseed unit completed the acquisition of Seeds 2000, a privately held company that researches and develops sunflower hybrids and markets of sunflower, corn and soybean varieties.

Seeds 2000 has annual revenue of some US$20 million. Nuseed boosted revenue by more than half to A$65.7 million in the year ended July 31, with segment earnings of A$18.8 million. That made up 9.8 percent of earnings before interest and tax, even though seeds make up just 3 percent of Nufarm’s total sales.

“Our seeds business is generating excellent returns for the company and this acquisition is a great fit with our existing operations,” Nufarm chief executive Doug Rathbone said in a statement.

At today’s annual meeting in Melbourne, Rathbone singled out the seeds business as one of the company’s bright spots, and said Nuseed’s new Chicago headquarters reflects the board’s view “the majority of future growth will be in the Americas.”

The acquisition comes just a week after Nufarm completed a refinancing three-year facility with a syndicate of lenders made up of Australian & New Zealand Banking, Credit Suisse, Deutsche Bank, Mizuho Corporate Bank, UBS, and UniCredit. Rabobank provided a A$300 million securitisation facility in August.

Nufarm had to find new funding lines to replace a one-year A$900 million banking facility put in place in November last year, which itself was used to refinance ballooning debt through the middle of last year. It had drawn down A$798 million of that facility as at July 31, according to the annual report.

Rathbone told shareholders Nufarm expects to post a profit of A$22.7 million in the six months ended Jan. 31. It made an annual loss of A$49.5 million on rising finance costs and a write-off of A$28 million.

Nufarm's $251 million of NZX-listed perpetual, subordinated, unsecured, redeemable exchangeable notes last traded on Tuesday at $103 per $100 face value, up from as low as $85 in September this year.

The ASX-listed shares were unchanged at A$4.75 and have shed 8.8 percent this year.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Delegat Group Limited (NZX: DGL) $333 million syndicated bank facilities
7th December 2021 Morning Report
Sky Network Television Limited (NZX: SKY) Transformation accelerates - Sky raises FY22 guidance
PGG Wrightson Limited (NZX: PGW) FY22 Operating EBITDA forecast to better last year
Vulcan Steel Limited (NZX: VSL) Trading Update & Earnings Upgrade
6th December 2021 Morning Report
Synlait Milk Limited (NZX: SML) Partnership to enhance soil health; test regen ag practices
Property for Industry Limited (NZX: PFI) Strong Valuation Outcome, Penrose Acquisition
3rd December 2021 Morning Report
Fonterra Shareholders Fund (NZX: FSF) Fonterra provides Milk Price, earnings and Q1 update