ICL acquires a Brazilian company for 400 m – the capital market

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(Formerly ICL) reports that it has signed a binding agreement to acquire a Brazilian company that deals with plant nutrition for $ 400 million. The acquired company coordinates the field in the South American region of Compass Minerals, and ICL is expected to use mainly its distribution capabilities in Brazil for their products. Completion of the transaction is expected in the third quarter of the year with the splitting of the company’s operations from the tags and the completion of the conditions precedent and subject to regulatory approval in Brazil.

ICL’s report states that the company offers a number of plant feeding solutions, which include stimulation, soil and seed treatment, and cover all types of prominent crops in Brazil. The company produces advanced fertilizers characterized by high efficiency, micronutrients (“trace nutrients”) for soil and plants and secondary nutrients. The company is active in 25 of Brazil’s 26 countries, and operates in front of 32,000 customers. Direct sales to farmers account for 50% of total sales.

“The deal, along with the recent acquisition of Partilacawa in Brazil, and our existing plant feeding activity in the country, will position ICC as the leading specialty fertilizer company in Brazil – one of the fastest growing agricultural markets in the world,” said ICL CEO Raviv Zoller “The acquisition will balance the seasonal impact between our operations in the north of the globe and that in the south, as well as create opportunities for synergy.”

ACL shares recently received a buy recommendation from Discount Brokerage at a target price of NIS 23 per share, while the market price is currently NIS 20 per share. Discount predicts that the positive momentum in the company will continue into 2021: “Most agricultural commodities continue to record price increases. The good condition of farmers in the world, along with an increase in growing areas, leads to high demand for fertilizers. After a very weak year in 2020, ICL in 2021, with a doubling in net profit, “wrote Michal Alsich, research director and accountant at Discount Brokerage. Alsich added that” beyond the increase in quantities and prices, we also expect an improvement in profitability, mainly due to the efficiency of potash. Most of the improvement in the reports is expected to be reflected starting in Q2. ”