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The Waterbury Connecticut based chemicals company Platform Specialty Products, said today it has agreed to acquire Chemtura’s AgroSolutions division for US$950 billion in cash and 2 million of its common shares, for a total consideration of US$1 billion.
This is the second major acquisition for the company after it bought another specialty chemicals business, Macdermid, in October for US$1.8 billion.
Chemtura AgroSolutions makes chemicals and seed treatment products for the agricultural industry, and generated sales of nearly US$450 million in 2013. Since the economy bottomed in 2009 its sales have been growing rapidly, demonstrating the sound cyclical timing of such “rust-belt” chemical industry investments.
Dan Leever Platform’s CEO said “This transaction demonstrates our ability to execute our clearly-defined growth strategy and provides us with a strong position in an attractive new vertical, adding “CAS’s innovation capabilities and highly-skilled technical and service personnel create a unique value proposition, ” Chemtura will continue to supply key active ingredients to the business under a long term supply agreement.
In May 2013, Nicholas Berggruen and a long time business partner of his Martin Franklin, who is Executive Chairman of consumer products company Jarden, floated a special purpose acquisition company, incorporated in the British Virgin Islands, on the LondonStock Exchange – a form of business entity colloquially known there as a “blank check” company.
Blank check companies raise money to make acquisitions in advance of actually having targets specified, and do so purely on the basis of the trust that is placed in their promoters’ capabilities. If the money is not spent within a two year grace period, it is given back. As both men are prominent and successful businessmen the two founders held great credibility in the London capital markets. In the US a more formal and much less romantic name, “special purpose acquisition company”, or SPAC, is usually given to such entities.
Platform Acquisition Holdings as it was appropriately, if not very imaginatively, called – being quite literally a platform for acquisitions – raised US$885 million gross from the flotation last May. Net of issue costs it put US$861 million into the new vehicle’s corporate treasury and Berggruen and Franklin then went looking for things to buy.
As an entity incorporated under British Virgin islands corporate law, Platform was also not automatically required to seek shareholder approval for any initial acquisition, which would obviously be material to its fate, it ultimately should choose to make.
At the time Platform said it was looking for a target company with an enterprise value of between US$750 million and US$2.5 billion. Their first choice was said to be an oil business, and when that failed to fly their advisers put their high throughput screens to work sifting through industries and companies, and came up with a new, viable, target.
This led directly to their first deal when, in October 2013, Platform acquired the Connecticut based specialty chemical producer MacDermid, for US$1.8 billion, including assumption of US$754 million of its indebtedness.
Macdermid’s then CEO, Dan Leever, now runs the Platform public company as well, which today has offices in Waterbury, Connecticut as well as an executive headquarters in Miami, Florida.
After closing the Macdermid acquisition Platform renamed itself Platform Specialty Products, then moved its incorporating jurisdiction to the State of Delaware. Finally it moved its stock exchange listing as well, from London to the New York Stock Exchange, where today the company has a market capitalization of US$2.4 billion.
There are now not quite 120 million shares of Platform currently outstanding, up from the original 88.5 million shares at the time of its original flotation. The difference represents moneys raised along the way from the conversion of most of the 1 for 3 warrants which were also given out at the time of the original flotation.
Some were converted in an offer the company made when it bought Macdermid, raising an incremental US$146 million for Platform at the time. The rest have been converted more recently, raising a similar additional amount, as the price of the stock has nearly doubled since the flotation putting them all firmly in the money.
Just two weeks ago the company finally shut down what was left of the original three-year term of the warrants, under a previously announced mandatory redemption programme, effectively forcing conversion of the bulk of the outstanding warrants, in a shrewd financing move.
Bill Ackman, who runs the big hedge fund Pershing Square, also signed on as a Platform shareholder, and indeed is currently the company’s largest shareholder with a 28% stake. He has worked with Berggruen and Franklin before too, in another special purpose acquisition vehicle, Justice Holdings, which ultimately brought Burger King Worldwide back to public markets in 2012 when it took a 31% stake. A Pershing Square partner, Ryan Israel, currently sits on the Board of Directors of Platform, representing the hedge fund.
The new acquisition seems like a solid enough deal, and Platform have indicated that, on a pro forma basis, Macdermid and their new AgroSolutions unit would have together generated a combined revenue of US$1.2 billion in calendar 2013, and combined adjusted EBITDA of US$281 million. A year ago they had nothing. As to the entity’s long term staying power of course only time will tell, but it is a great start.
About Nicolas Berggruen
Nicolas Berggruen is worth US$2 billion according to the Forbes billionaires list as at September 2013. Today he is the Chairman of Berggruen Holdings, a private company, which has operations in the U.S., Europe, and Asia, as well as business, real estate and financial investments globally. The Berggruen Group operates out of offices in New York, Berlin, Istanbul, Tel Aviv and Mumbai.
Nicolas Berggruen has also established the Nicolas Berggruen Institute, an independent, non-partisan think tank, which encourages the study and design of systems of good governance suited for the 21st century.
Recently for one of his latest ventures Nicolas Berggruen, and a business partner Martin Franklin, floated what is called a “blank check” company on the London Stock Exchange just in May of this year. Blank check companies raise money to make acquisitions in advance of actually having targets specified, and do so purely purely on basis of trust that is placed in their promoters’ capabilities. Platform Acquisition Holdings, as their new vehicle, or indeed “platform” is called, is now shopping for a target company that has “an enterprise value of between US$750 million and US$2.5 billion” according to the company. Good luck indeed.
Nicolas Berggruen is also the developer, together with local group Hagag, of a beautiful needle shaped luxury apartment building on the Rothschild boulevard in Tel Aviv, that is now nearing completion. Designed by Richard Meier it is intended to epitomize the arrival of Tel Aviv on the world scene as able to offer the best of modernism in its living spaces. With a very strong Bauhaus building tradition behind it since the nineteen thirties, it has actually always had that unrealized potential.
One might like to think that Berggruen might now actually buy one of the apartments and finally call something home!
Born in Paris, in 1961, Nicolas studied at L’École Alsacienne before attending Le Rosey in Switzerland. He later obtained a Bachelor of Science in Finance and International Business from New York University in 1981, and then cut his teeth in the world of finance at Bass Brothers. Today he holds dual German and American citizenship. In 1985 he launched Berggruen Holdings to manage the family fortune amassed by his father, an international art dealer who assembled a very important collection of works of modern art by artists such as Pablo Picasso and Paul Klee after World War Two.
In the process he obviously has inherited his father’s passion for art, owns pieces by Warhol, Basquiat and Koons and sits on the boards of the Museum Berggruen, Berlin, set up in Berlin by his father’s gift, and the Los Angeles County Museum of Art, and is a member of the International Councils for the Tate Museum, London and the Museum of Modern Art, New York.
The rest of the world who know him call him the “homeless billionaire” for an endlessly peripatetic lifestyle of constant travel, without even owning one single residence of his own where he can just put his feet up, unwind a little and call it “home”. He would be the perfect example perhaps of the “Wandering Jew” – except that only his father was Jewish, with his mother being Catholic. Berggruen has also said he plans to give all his wealth away some day.
His father was Heinz Berggruen, a Jew who lived in Berlin and fled to the United States from the Nazis in the 1930′s eventually settling in Paris, where he built one of the world’s most important art collections. His mother is the German actress Bettina Moissi who became Heinz Berggruen’s second wife in 1960. In an interview with Der Spiegel in 2007 Nicolas said his father was not a religious man, he was more interested in culture, and went on “My mother is Catholic, my father Jewish. I’m actually both. But I would not call myself a religious person”.
The Berggruen Museum, also known as the Berggruen Collection, is a collection of modern art classics in Berlin, which the collector and dealer Heinz Berggruen, in a “gesture of reconciliation”, gave to his native city in 1996 for a price well below its actual value. The most notable artists on display include over 100 works by Pablo Picasso, 60 works by Paul Klee together with other important works by Alberto Giacometti, Georges Braque, and Henri Matisse. Nicolas’ father finally died in 2007 at the ripe old age of 93 and was buried by his own personal wish in the forest cemetery in Waldfriedhof Dahlem, in Berlin – a second act of reconciliation with his roots.
At the age of twelve, Nicolas declared personal independence and at his own request was enrolled in the exclusive Le Rosey boarding school in Switzerland, where he read Marx and Lenin, Sartre and Camus, communists, existentialists — mostly left wing authors. “I was very, very, left-wing, ” he said in a later interview with Der Spiegel two years ago, “a real rebel.” A Marxist in one of the most exclusive private schools in the world – something he could say completely without sense of contradiction….. only the really rich can have sufficient detachment from existential struggle perhaps to be true Marxists.