SYDNEY, Australia – Nufarm, an Australian-based herbicides and chemicals manufacturer, said Wednesday it has agreed to buy 49.9 percent of Brazilian herbicides company Agripec Quimica e Farmaceutica S.A. for US$120 million in a deal that will add A$12 million to Nufarm's net profit in its fiscal 2005 year.
The acquisition, which will be debt funded, is subject to final due diligence and is expected to be completed by the end of November, Nufarm said in a statement to the Australian Stock Exchange.
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Privately owned Agripec, Brazil's largest locally owned crop protection company, is forecast to have calendar 2004 sales of about US$200 million.
Nufarm said Agripec has experienced strong sales growth in recent years, reflecting the substantial growth in agricultural production in Brazil.
Nufarm Managing Director Doug Rathbone said the Agripec stake will be a key element of Nufarm's expansion in South America.
After the U.S. and Japan, Brazil is the world's third-largest domestic market for herbicides, with annual sales of US$1.3 billion.
Also Wednesday, Nufarm said its net profit for the fiscal year ended July 31 rose 19 percent to A$76.2 million from A$64.3 million a year earlier.
The company declared a final dividend of 15 cents a share, up from 13 cents a share the year before.
Around 0210 GMT, Nufarm shares were up 25 cents, or 3.9 percent, at A$6.70.