Compass Minerals has agreed to pay $115.9 million for a 35% stake in Brazilian specialty plant nutrient manufacturer and distributor, Produquímica Idustria e Comercio SA, according to a company statement. Under the terms of the agreement, which gives Compass Minerals a foothold in Brazil’s specialty plant nutrition market, Compass will have the option to increase its ownership in Produquímica to 100% by 2019.

 

“Produquímica has a long history in Brazil and strong prospects for continued growth and margin expansion,” said Fran Malecha, Compass Minerals’ president and CEO in a company release. “Its wide range of specialty plant nutrients, application technologies, and extensive distribution network, are uniquely positioned to meet growers’ need for yield enhancement. Produquímica is a good strategic fit with our existing plant nutrition business, and this investment is an important part of our growth plan.”

 

Based in São Paulo, Brazil, Produquímicia controls two key businesses – agricultural productivity and chemical solutions, through which it is expected to report a combined R$1 billion in revenue and R$180 million in estimated earnings before interest, tax, depreciation and amortization (EBITDA) in 2015. The agricultural unit manufacturers and distributes a range of specialty plant nutrition solution-based products, including micronutrients, controlled release fertilizers, specialty soil supplements, foliar applications, and seed treatments. The chemical solutions unit produces specialty chemicals for the water treatment industry and domestic industrial processes.

 

Overland Park, Kansas-based Compass Minerals is a leading producer and supplier of essential minerals to the industrial, consumer, and agriculture industries, and also produces special plant nutrition minerals to improve the health and yield of crops.

 

“We are pleased to partner with Compass Minerals in Brazil’s specialty plant nutrition and chemical market,” said Gerhard Schultz, President of Produquímica. “This investment from a strong, U.S.-based company allows us to accelerate our growth initiatives and benefit from the exchange of knowledge between our two companies.”

 

To fund the purchase of the stake, Compass Minerals and select subsidiaries have entered into a $100 million incremental term loan which will be an amendment to its existing secured credit facility.