Origin Enterprises completes €49m Brazilian acquisition

Origin has option to acquire remaining 35% of Fortgreen Commercial Agricola

Tom O’Mahony, chief executive of Origin Enterprises. Photograph: Eric Luke

Tom O’Mahony, chief executive of Origin Enterprises. Photograph: Eric Luke

 

Agri-services group Origin Enterprises has completed the acquisition of a majority interest in a Brazilian speciality nutrition business for up to 218 million Brazilian real (€49.1m).

In a stock market announcement, the company said it had acquired 65 per cent in Fortgreen Commercial Agricola, a deal that marks its entry into South America.

As part of the transaction the company has agreed to acquire a 20 per cent shareholding in Ferrari Zagatto E Cia – an agronomy service and crop input distribution business – which is expected to close during the first half of the company’s 2018/19 financial year.

Fortgreen is focused on developing value-added crop nutrition and services for around 1,200 customers. Announcing the acquisition earlier this year, Origin said it offered an “excellent entry point” into the Brazilian market.

Under the terms of the transaction Origin is acquiring the shareholding on a cash-free and debt-free basis for an initial cost of 179 million Brazilian real. An additional consideration of up to 39 million Brazilian real will be payable 12 months after the acquisition if specific profit targets are achieved.

Fortgreen’s revenue for 2017 reached 123 million Brazilian real, while earnings totalled 40 million Brazilian real.

Origin has also agreed to acquire the remaining 35 per cent shareholding on a specified date, with the purchase price linked to future profitability of the company. Separately, the company can acquire an additional 40 per cent in Ferrari in 2020.

Growth opportunities

“Fortgreen and Ferrari underline Origin’s strategic priority to scale its technology and service portfolios in markets which provide tangible growth opportunities. The transactions also provide the platform to address the group’s requirements for meaningful geographical diversification and seasonality balance,” the company said.

Earlier this year Origin acquired a Belgium-based fertiliser company, Pillaert-Mekoson, for an undisclosed sum. That company is a provider of standard and prescription fertilisers in Belgium and the surrounding regions, with a turnover in the 2017 financial year of €35 million.

Listed on Dublin’s ESM market and London’s AIM, Origin focuses on specialist agribusiness services and has a presence in Ireland, Britain, Belgium, Poland Romania and Ukraine.