UPL Corp, a wholly-owned subsidiary of Indian agrochemicals major UPL, has signed an agreement to acquire Arysta LifeScience and its subsidiaries from NYSE-listed Platform Specialty Products Corp for about $4.2 billion in an all-cash-deal. The deal will help UPL further strengthen its position as a global leader in crop protection with $5 billion in sales.

A wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) and PE firm TPG Capital Asia are supporting UPL Corp in the deal, with an investment of $1.2 billion ($600 million each). The investment will result in the companies — ADIA and TPG Capital Asia – getting about 22 per cent combined shareholding in UPL Corp, the companies said in separate releases.

“Arysta has a differentiated position in the crop protection market given its focus primarily on specialty applications and tailored local solutions. This is in line with our long-term vision of becoming a premier global provider of agricultural solutions designed to secure the world’s long-term food supply,” Jai Shroff, Group Chief Executive Officer and Executive Director at UPL said.

The acquisition will enable UPL offer solutions for various arable and specialty crops comprising crop protection chemicals, BioSolutions and seeds. This would cover the entire crop value chain from planting to post-harvest. This deal will also give UPL access to a variety of patented products through collaborations and partnerships and in-house R&D.

“We decided to separate our businesses last year in order to position both the Performance Solutions and Agricultural Solutions businesses for future growth and additional compelling value creation opportunities,” Martin E. Franklin, Chairman of Platform, said.

Arysta is into development, formulation and distribution of crop protection chemicals for a variety of crops and applications, with presence across fungicides, herbicides and insecticides. For the 12-months ended March 2018, Arysta posted an operating revenue of $2 billion and adjusted EBITDA of $424 million.

“The combined platform will generate compelling synergies, and with the addition of Arysta, UPL will reach more than 130 countries with more than 12,800 products and be well poised for further expansion in their sector,” Puneet Bhatia, Co-Managing Partner at TPG Capital Asia said.

UPL Corp will finance the investment through a combination of newly-issued equity and debt. It has debt financing commitments of $3 billion for the balance (with bullet maturity of 5 years) from MUFG Bank and Coöperatieve Rabobank U.A. (Hong Kong Branch).

UPL expects the acquisition, which is expected to be completed by late calendar year 2018 or early 2019, to be earnings per share accretive by ₹10-12 per share in FY2020.

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