November 27, 2013
Yara to acquire OFD Holding worth US$425 million
Yara International ASA will spend US$425 million tobuy OFD Holding Inc. (OFD) from Omimex Resources Inc., which comprises production facilities in Colombia and distribution companies across Latin America.
The main companies included in the transaction are Abocol (Colombia), Misti (Peru), Omagro (Mexico), Fertitec (Panama and Costa Rica), Cafesa (Costa Rica) and Norsa (Bolivia). The transaction further strengthens Yara''s downstream footprint and growth platform in Latin America, and is highly complementary to its recent acquisition of Bunge''s fertiliser business in Brazil.
"I am excited to announce this agreement, which re-confirms Yara''s long-term commitment to Latin America. OFD fits well with Yara, and will further improve our downstream positioning within the fast-growing cash-crop markets in the region," said Jørgen Ole Haslestad, President and Chief Executive Officer of Yara.
"We are fully convinced that the knowledge, experience and portfolio of a global company like Yara, combined with the regional know-how of OFD group of companies in each of the countries, added to our closeness to the Latin-American farmers, will help our customers reach the required levels of agricultural productivity," said Jorge Bernal, President at Abocol S.A.
OFD owns and operates a fertiliser production facility in Cartagena with an annual capacity of approximately 320 kilotons (kt) compound Nitrogen, Phosphorus, Potassium (NPK), 100 kt calcium nitrate (CN) and 70 kt ammonium nitrate (AN), with integrated ammonia production. In addition, OFD has a production capacity of 25 kt single super phosphate (SSP) per annum through Fosfatos de Boyaca in Colombia. Finally, OFD controls approximately 700 kt of NPK blending capacity across 12 sites and 100 kt liquid fertiliser capacity as part of its fertiliser distribution network across Colombia, Mexico, Peru, Bolivia, Costa Rica and Panama.
In 2012, OFD sold 1,131 kt of fertiliser, generating net revenues of US$796 million and an EBITDA of US$35 million. The EBITDA was US$64 million in 2011. The US$425 million enterprise value includes working capital of US$332 million. Yara estimates an annual synergy potential of US$20 million through logistics and sourcing optimisation and substituting third-party sourced products with Yara products.